BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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ISSUE OF ORDINARY SHARES AFTER THE REPORTING PERIOD
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MAJOR PURCHASE OF AN ASSET AFTER THE REPORTING PERIOD
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BANKCRUPTCY OF A CUSTOMER AFTER REPORTING PERIOD
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PLAN TO DISCONTINUE AN OPERATION AFTER THE REPORTING PERIOD
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Detailed explanation-1: -An example of a non-adjusting event after the reporting period is a decline in fair value of investments between the end of the reporting period and the date when the financial statements are authorised for issue.
Detailed explanation-2: -Examples of non-adjusting events, that would generally result in disclosure (continued), include: • announcing a major restructuring after reporting date; • major ordinary share transactions; • abnormally large changes, after the reporting date.
Detailed explanation-3: -Events after the reporting period are those events, favourable and unfavourable, that occur between the end of the reporting period and the date when the financial statements are authorised for issue.
Detailed explanation-4: -Which of the following events after the reporting period would require adjustment in an entity’s financial statements? Bankruptcy of a customer, which occurs after the end of the reporting period and before the issuance of the statements, resulting in the loss of a trade receivable account.