Chapter 14, Problem 9Q

To determine

Prior period adjustment: The rectification of errors in financial statements that have already been completed earlier.

Financial statements: The statement prepared for the specific period which comprises the financial information of the organization. It includes a statement of income which shows the profitability of the business, balance sheet which shows the financial position in the terms of assets, liabilities, and capital, and cash flow statement which represents the cash flows for the accounting period.

To determine: The prior period adjustment and its reporting in financial statements.