BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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A change in tax rate announced after the reporting date, but affecting the current tax liability
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The discovery of a fraud which had occurred during the year
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The determination of the sale proceeds of an item of plant sold before the year end
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The destruction of a factory by fire
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Detailed explanation-1: -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-2: -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-3: -What is a Subsequent Event? A subsequent event is an event that occurs after a reporting period, but before the financial statements for that period have been issued or are available to be issued. Depending on the situation, such events may or may not require disclosure in an organization’s financial statements.