The Pecan Street Ice Cream Company discovers that depreciation expense was overstated last year. How should this discovery be reported in the current year? Answer as a reduction in the current year's depreciation expense as an increase to the retained earnings beginning balance as a miscellaneous item in the Other Revenue/Expense section of the income statement as a footnote only to the current year's financial statements

The Pecan Street Ice Cream Company discovers that depreciation expense was overstated last year. How should this discovery be reported in the current year?

Answer

		as a reduction in the current year's depreciation expense
		as an increase to the retained earnings beginning balance
		as a miscellaneous item in the Other Revenue/Expense section of the income statement
		as a footnote only to the current year's financial statements

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