A prior period adjustment appears in the financial statements of the current year when:

Multiple Choice

An error was made in computing the net income of the current period.

An error was made in measuring the net income of a previous year or years.

A non-recurring loss in a prior year was not separately stated (but still included in total results of operations for the year).

Earnings per share figures from prior years are restated to reflect the increased number of shares outstanding due to a stock split or a stock dividend.