If a ________ inventory error is discovered in an accounting period subsequent to the period in which the error was made, any previous years' financial statements that were incorrect as a result of the error are retrospectively restated to reflect the correction. And, of course, any account balances that are incorrect as a result of the error are corrected by journal entry. If, due to an error affecting net income, retained earnings is one of the incorrect accounts, the correction is reported as a prior period adjustment to the beginning balance on the statement of shareholders' equity. In addition, a disclosure note is needed to describe the nature of the error and the impact of its correction on net income, each line-item affected, and earnings per share.

Fill in the blank(s) with the appropriate word(s).

Ans: material