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Rickles,Inc

Question 4

Multiple Choice

Rickles,Inc.is a calendar-year corporation whose financial statements for 2013 and 2014 included errors as follows: Rickles,Inc.is a calendar-year corporation whose financial statements for 2013 and 2014 included errors as follows: Assume that purchases were recorded correctly and that no correcting entries were made at December 31,2013,or December 31,2014.Ignoring income taxes,by how much should Rickles's retained earnings be retroactively adjusted at January 1,2015? A) $27,000 increase B) $27,000 decrease C) $7,000 decrease D) $3,000 decrease Assume that purchases were recorded correctly and that no correcting entries were made at December 31,2013,or December 31,2014.Ignoring income taxes,by how much should Rickles's retained earnings be retroactively adjusted at January 1,2015?


A) $27,000 increase
B) $27,000 decrease
C) $7,000 decrease
D) $3,000 decrease

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