BACHELOR OF BUSINESS ADMINISTRATION

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BUSINESS ADMINISTRATION

FINANCIAL ACCOUNTING

Question [CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
Which of the following material events after the reporting period and before the financial statements are approved by the directors should be adjusted for in those financial statements?1-A valuation of property providing evidence of impairment in value at the reporting period2-Sale of inventory held at the end of the reporting period for less than cost3-Discovery of fraud or error affecting the financial statements4-The insolvency of a customer with a debt owing at the end of the reporting period which is still outstanding
A
All of them
B
1, 2 and 4 only
C
3 and 4 only
D
1, 2 and 3 only
Explanation: 

Detailed explanation-1: -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.

Detailed explanation-2: -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-3: -Which event after the end of reporting period would generally require disclosure? At the end of the current reporting period, an entity carried a receivable from a major customer who declared bankruptcy after the end of reporting period and before the issuance of financial statements.

There is 1 question to complete.
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