MissTake Corp

Multiple Choice

MissTake Corp.is a small private corporation that does not prepare comparative statements.At the end of their 2017 fiscal year, it was discovered that the 2016 depreciation expense on their computer equipment had been incorrectly debited to maintenance expense.How should MissTake deal with this situation?

A) Prepare an adjusting entry to debit depreciation expense and credit maintenance expense.
B) Prepare an adjusting entry to debit retained earnings and credit maintenance expense.
C) Restate their 2016 financial statements.
D) Ignore it.