If a company makes a prior period adjustment, which of the following describes how it must be reported?

a. The adjustment is reported in the current period's income statement as a separate item.

b. The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are not changed.

c. The adjustment is recorded as a deferred asset or deferred liability and amortized using the straight-line method.

d. The adjustment is recorded in retained earnings, and previous years' financial statements presented for comparative purposes are adjusted.