corrections-of-errors-that-occurred-on-a-previous-periods-financial-statements-are-called-________-a

Question

Corrections of errors that occurred on a previous period’s financial statements are called ________.
A. restrictions
B. deficits
C. prior period adjustments
D. restatements

Puneet Prajapati · Accepted Answer

Okay, so let&#x27;s understand the current solution, but before moving to the city should be will understand the cool concept. Okay, so it is actually a matter on the basis of which accounting is done in many, almost every over. In addition. Okay, in beautifully. It is a method the cheese employed by an entity do regard the expense or income it respective off it respective. Off making its spirit. What receiving be David? However, we have return a technical definition here. It will be more clear to you. Then we will understand it whom the wigs are. Okay, so let&#x27;s move. For example, by let&#x27;s suppose there is a Mr a who isn&#x27;t bailing off. Let me judge, OK? And they did. Mr. B, who is that estimate and was Mr D Okay, so Mr is in Mr B&#x27;s estimates. So, Mr Raising beating off furniture like selling furniture, they just a bit no. What happens just does a sort of meticulous to be so where to find me, Mr Bean. But Mr Besart mystery that he will pay off later funding time like within money order. Mr. B is not going to pay omitted. So in that case, just sold for nature off one game when your daughters okay? No, Mr E record this amount as is in in his books off balance by that. So because the upper World concepts A&#x27;s, it is a matter which isn&#x27;t hard financially to record the expense or income it respect do off. Making experiment off expense. Receiving the favorite. Okay, so Mr A. Will record $1000 as is in community books off a couch as predict accruals concept. Because the concept is even when the emergency services have been provided to a customer. But the payment has been received immediately even then. Even then, the business and record the value of goods and services as its income. Okay, next come to our example, inch support the mystery. And there is ABC company. Is that beautiful? Don&#x27;t. Okay, so Mr Mr Lazy complete provided some services. You cooked any foot like he can save because appreciates on point services when you read it services to Mr A being on it. Okay, now what happened? Mr is like to Mr ABC Company that I will pay you in later point in time. When I received the amount for amount from my customers. Okay, so let&#x27;s in the services, the services it was. But Oh, I wonder if voters okay, Know what happens? Mr. A will record $200 as his expense, because even when the phone has not being fair, but the services has bean, the services have bean a very by Mr It. Okay, so that implies Mr A. Has to pay these these expenses in a little on the time, in fact, is right. $200. It becomes reportable in the current financial year. Okay, because I could look on sixties that then ever the book, their homes or services will be provided or the the expenses will be encourage. The amount will be recorded in that financially, even when the payment has will be made or received in next financial year or subsequent. Manage. So you can know down. Example. One example. People along victor, definition of the concept get a clear idea of how the I that extension. So, yeah, I love it. The next solution and what is diabetic solution? The right choice, like choices. A. Okay, because only the well concept allows such methodology to record the transaction smoking. So that&#x27;s all. Okay, so that&#x27;s on forever. Solution. Thank you.

Puneet Prajapati · Answer

so let&#x27;s understand. Different solution. Okay, So we either in this time different, Different concept. Yeah. No. What is there definite? Except it is the concept. What is the concept? Which? Which the neighbors, the entity not do record the transaction. Okay. North to record the transaction. Even if yes has bean big receive in in? I didn&#x27;t find insecure. Okay, big understanding through an example. Let&#x27;s suppose there&#x27;s a Mr B and hated Mr B. Know what happens. Mr is dealing in business. Off foods and beverages. It&#x27;s selling food restaurants off. This is basically so Mr A is basically so Mr Re is dealing in restaurant services. Okay? No. What happens, Mr. B is the amount in advance 40 delivery off foods and beverages. Okay, Mr B B. Baby alone. I would be alone in advance for Bolivia for delivery of goods and services. Who? Mr B. Okay. Know what happens? Let&#x27;s suppose the payment has been done in an injury in line, but the delivery has to be ready financially. Year Okay. The following year? No, that that received off income will not be reportable incurring financial that this financial year. But so what is the trucks off the field concept that history, even if the amount has been received in currently it in advance, okay. For delivery of goods and services in future. Yet even then, the amount of Lord very portable in are infinite. It&#x27;s not difficult in a current. So this is the example. What? Now let&#x27;s come cloven example that Let&#x27;s suppose there is Mr a again on David&#x27;s Mr C. Okay, now what happens? Mr. E has big some amount for purchase of raw material. Forget, you know, being in the moment. Eight months. Okay, I know what happens. So Mr C says Okay, I have received the advance about but I will believer the raw material in financial year the next financial year. Okay, if financial Year two means next financial year fall. Okay. So, Roma devia What? Rahman either. Okay, No. Even when that Mr. Even when Mr He has paid the amount for raw material. But Jason, advance in financially. The amount will not very poor develop until it. Because it does not relate to financial year. Actually, it actually leads to financially your toe. Okay, so that concept will be bonus. Definitely one set. Okay, So the ocean is as just which off the falling Mettler methodology has mean Don&#x27;t mess. OK, so our correct choice. So So our correct choice. It is definitely okay back this choice. Be okay. So you can George down. She number one and she number Do on your notebooks for future reference. However, we have the right Never solution back this choice.

Puneet Prajapati · Answer

Okay, so we understand he died with adjustment President. The geese. So we have Definitely. Okay. Know what is? You wouldn&#x27;t mistake. It is a matter. Hurt enables an entity record delivery and expenses, and then they have being realised. Thanks. Incurred, respectively. Okay, so we have returned. Very technical regulation. However, evil in the standard threw up some good examples. Okay, so let&#x27;s take Mr Example. It sounds a lot Mr who is in dealing off. Certainly Jim Phillips. That&#x27;s Know what happens then? Mr. Receives anything over two months. Okay? It&#x27;s centered. Bonds, money. You can write it down this example on begin wrote books. We&#x27;ll get through for future reference. So this is the advancement which Mr C. Who is a customer? Mr. A. Okay. For eight years off, furniture builders know what happens this advance money, Okay, Unless it do, the furniture products will be delivered. Comes to see this advancement will be conceit. Considered as sort of Is that of any and a new president case. It is this whose revenue? Because Mr A has not yet provided any type of service on goods. Who? Mr C. Against Fished. He has deceived advance money from Mr C. Okay, so that is my such type of comes will be reflected in balance sheet. Okay. Who showed that that region has been happened? However, these items will be considered to be in guard and realized only upon on the appointed the specific recognition off these items. This item Let&#x27;s suppose Mr a believer that delivered the furniture perhaps enough subsequently it Mr C. So this visit revenue which we have recorded as unearned service living, will be considered as revenue for the next one inch area next financial year or in the car in front engine here. Okay, so we have good. I&#x27;ve never solution. So what is the which actually matches with choice be okay. That is what we have given another definition. Do okay. And you can know down this example You understand it better. No better. Thank you.

Puneet Prajapati · Answer

Okay, so we are going to understand the golden rule. Okay, so these rooms have accounting will be applicable throughout accounting as a subject. Okay. Ciclista fun. We went up that I think it would be easy going mistake. And there is also one more thing that there is no very substantial logic behind that. Why? These are rules framed like this. And why so do not have such confusion. Okay, just take a note of that. And when you will practice mold, you will get hand off. Okay? So increasing expenses and a sex, we will give it to them in case off degrees, expenses and the stakes be even give up that I did with them. So these are simple rules. Like whenever they will be increasing expense. Like whenever the business center people, you know, in car such expenses or purchases Somerset&#x27;s than those who constantly deputed and they will be They&#x27;re neat or corresponding reduction in expenses in Essex. So we&#x27;re doing so they don&#x27;t find types of pounds. Me 1st 1 is SX, then second, his expenses so increasing liability Okay. Capital and revenue. There is a corresponding credit. Okay. Whereas engaged over reduction in liability. Africa and revenue problems. There is a corresponding never. Okay, so the first rule off second. So the second door stairs that increasing liability capital and revenue account. We&#x27;ll have. Okay. Did anybody first and corresponding? Angry do, However, these we will understand that. Okay, so let&#x27;s take example to understand the situation. Let&#x27;s suppose there is mystery. Okay, Who is that? You know Oh, but or not our business from nature. Okay, Now what happens? There is a second old superstar. There&#x27;s a second bus and Mr Being So what happened? So Mr Beef frequently purchases for nature, perhaps from Mr Be like J R. Stables. Okay. On sort of products on Mr Biesecker. Okay. I will pay you advance money. Okay. I&#x27;ll be your advance money in this in this financial year. And you can do you even it up. Words like chairs and tables in next financial. So everyone&#x27;s money has been received in financially, but delivery will happen in financial year. Okay. No, what happens then? This. So there are two separate randich. And first, when you first witness deceit advance money and 2nd 1 is delivery will happen. So? So in current in financial year, then this advancement. He has been deceived. We will not recognize the value of goods and services as income in books of accounts. He okay, But when delivery will have been in next financial year backed amount, which has been recorded and financially, everyone, they will be an adjustment in three. Record the income in financially or two. Okay, so who convert the amount that has been recorded in financial year into income off financially, they will be just vanity. Okay, so in that case, so I just one entry will include or we can say, with the state. McDavid who? Lebanese vehicle, How Nixon to stay. Okay, so let&#x27;s understand, Exposed that if Mr A has received word wants money from Mr B. So they&#x27;re increases a liability off mystery. The words, Mr B. Off off delivery, off chairs and tables to Mr Be. Okay, so they&#x27;re increase a liability. And what we have said, if there is increasing liberty, they will give up. We will give up, ready to them. Okay. Now, in case off adjusting and re when we will convert the advance money into income over an engineer too, because whenever there delivery will be made that they never knew or the advance money that has been received in financially of one. Okay, will be recognized as income in second financially. Yet based on the delivery made by mystery for listener be okay. Now, In that case, if there is adjustment Anti so there will get gonna spending Dabiq to the same account. Which, which hag? The crediting, for instance instead. Okay, so that&#x27;s how we do in the campaign. Like, let&#x27;s suppose advance advance payment. Okay, so we have. So let&#x27;s say so. We haven&#x27;t seen the advance payment, okay? No one ever. They will receive advance payment before delivery a woman&#x27;s offices. It will create a liability having a day of work off delivery of goods and services to estimate. But then in next, financially and supple lets it. This is a matter often interrogated, and we have come through financially. No one. We will deliver the goods and services so far in peace and liberty, they will be a petting. Okay, okay. Now, in case of delivery, they really direction in liability by because for fear as a liability, its delivery off goods and services to estimate mr me No, we believe a corresponding damage to them That would do the same in advance and payment. First of all, it will get credit. Then it will get double for the same. All. Okay, so back matches rip. Okay, So the whole process his Mac matches with choice. The for the current question that this the ankle that has bean collected. Okay, so they income has been collected in advance in financially oven. However, it will be recognized in financial year. Who? Okay, based on the delivery of goods and services to Mr Be. Okay, that&#x27;s all forever. Solution. However, we have the right. Joyce G is correct. OK, thank you.

Puneet Prajapati · Answer

Okay. So people understand the meaning off. I also deceiving you for by that, even in this day, that gullible estimate My Which 13 B estimate that off How much we are doing on the count. But first of all, let&#x27;s understand the meaning of the houses. Okay, So when I said it is Mr G, who is that? Is this one? Yeah. Who is in dealing Lol Foods and beverages. I did it. Mr Be So, Mr Visa, Most of my through Mr J. So, Mr J soldiers serving words off Ma Myst December, Mr. But Mr Be their customers because the muscles to be set they gathered. You okay for Mr J agreed with this, however. What happens then? The time arrives, okay. When? Their time when I used to be. Well, Mr J. Mr. B, as here. But before that twisted Mr Geezer there. Okay, I understand that the we even be able to deceive the amount that was recovered. That is completely from over by be sure Estimate that How much off there tomorrow. Okay, so Mr J follows Mr J emphasised estimation like this off that that expense. Okay, so there is a popular that It says that night. I suppose Mr Be asked for three months. So previously we big gun there, Mr. Be there didn&#x27;t bite unless disciples initially he asked for initially the passport agreements, but later balding guy. But Mr B, but not was not able to be with demons so he asked for. And the three months. But still he was not able to pay the any. Ask for another two months night twice He kept going in freezing, thinking on your feet. Have you so a popular? I think it says that when I love that about Okay, Mr Visa, that Mr J will be so when it is a person from home that from the amount of saying it&#x27;s become sylvan that keeps on increasing the credit here. Okay, so the provide the probability off recovering the amount the same from the doctor will become very, very, very nous because business entity or we can say it, Mr. G. However, Mr Back Mr B is only delaying via home, okay? He is not willing to pay the home otherwise, he was happy within in each other. Okay, so that process, which we have just disclosed Okay, that matches with choice D. It says that Why is that? Better violence, Steve Becoming old and old by the time passes. Okay, de priority off Recovering the money from the government will be very, very less so. That method We can also understand that methods as Manan cheap aging office. Okay, so packed matches get choice deep tries deed the correct answer. Okay, that&#x27;s all part of a solution. Thank you.

Problem

Owner’s equity represents which of the following?…

Problem 18 Easy Difficulty

Corrections of errors that occurred on a previous period’s financial statements are called ________.
A. restrictions
B. deficits
C. prior period adjustments
D. restatements

Answer

Related Courses

Principles of Accounting Volume 1: Financial Accounting

Related Topics

Discussion

Top Educators

Recommended Videos

Watch More Solved Questions in Chapter 14

Video Transcript

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting

What do you need help with?

Textbooks

Ask a question

Courses

AI Tutor

Principles of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon CooperPrinciples of Accounting Volume 1: Financial Accounting

Mitchell Franklin, Patty Graybeal, Dixon Cooper

Principles of Accounting Volume 1: Financial Accounting