Solution: Net income for The Yellow Submarine, Inc. was understated in 2005 by $110,000. The entry to record the correction in 2006 includes a: a. Debit to Retained Earnings b. Credit to Retained Earnings c.

Problem

Net income for The Yellow Submarine, Inc. was understated in 2005 by $110,000. The entry to record the correction in 2006 includes a:

a. Debit to Retained Earnings

b. Credit to Retained Earnings

c. Debit to Income Summary

d. Credit to Income Summary