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QUESTION 1: If an expense is inadvertently omitted in a year prior to the years...

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Accounting

QUESTION 1:

If an expense is inadvertently omitted in a year prior to the years presented in the current year financial statements, the correction is debited to opening retained earnings in the earliest period presented. An alternative sometimes proposed is that the error should be recognised in profit or loss in the period it is discovered. What are the reasons for proposing the error be presented through profit or loss in the period it is discovered?

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