1.Which of the following items requires a prior period adjustment to retained earnings?

A. The prior years foreign currency translation gain of $2 million was never recorded.

B. Purchases of inventory this year were overstated by $5 million.

C. Revenue of $5 million that should have been deferred was recorded in the previous year as earned.

D. Available-for-sale securities were improperly valued last year by $20 million.

2.Is the cumulative effect of an inventory pricing change on prior years earnings reported separately after results of discontinued operations and before net income for a change from

LIFO to	FIFO to
Weighted Average?	Weighted Average?

A.

Yes

Yes

B.

No

No

C.

No

Yes

D.

Yes

No