1. A company makes an error in 2016 that overstated its 2016 net income and discovers the error in 2018. When preparing its 2018 financial statements, the company should: (3 points)

a) Report a non-operating loss on its 2018 Income Statement that reduces 2018 net income.

b) Ignore the error since it has probably corrected itself.

c) Report a prior period adjustment on its 2018 Statement of Retained Earnings that reduces the January 1, 2018 balance of Retained Earnings.

d) Report an OCI loss on its 2018 Statement of Comprehensive Income that reduces 2018 comprehensive income.