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Miss Take Corp. is a small private corporation that does NOT prepare comparative statements. At the end of its 2023 fiscal year, it was discovered that the 2022 depreciation expense on its computer equipment had been incorrectly debited to maintenance expense. How should Miss Take deal with this situation? Prepare an adjusting entry to debit retained earnings and credit maintenance expense. Prepare an adjusting entry to debit depreciation expense and credit maintenance expense. Restate its 2022 financial statements. Ignore it, it is likely immaterial.

Miss Take Corp. is a small private corporation that does NOT prepare comparative statements. At the end of its 2023 fiscal year, it was discovered that the 2022 depreciation expense on its computer equipment had been incorrectly debited to maintenance expense. How should Miss Take deal with this situation? Prepare an adjusting entry to debit retained earnings and credit maintenance expense. Prepare an adjusting entry to debit depreciation expense and credit maintenance expense. Restate its 2022 financial statements. Ignore it, it is likely immaterial.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Miss Take Corp. is a small private corporation that does NOT prepare comparative statements. At the end of its 2023 fiscal year, it was discovered that the 2022 depreciation expense on its computer equipment had been incorrectly debited to maintenance expense. How should Miss Take deal with this situation? O Prepare an adjusting entry to debit retained earnings and credit maintenance expense. Prepare an adjusting entry to debit depreciation expense and credit maintenance expense. O Restate its 2022 financial statements. ● Ignore it, it is likely immaterial.
Transcribed Image Text:Miss Take Corp. is a small private corporation that does NOT prepare comparative statements. At the end of its 2023 fiscal year, it was discovered that the 2022 depreciation expense on its computer equipment had been incorrectly debited to maintenance expense. How should Miss Take deal with this situation? O Prepare an adjusting entry to debit retained earnings and credit maintenance expense. Prepare an adjusting entry to debit depreciation expense and credit maintenance expense. O Restate its 2022 financial statements. ● Ignore it, it is likely immaterial.
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