If It Becomes Known After Reporting Date That a Debtor

question 14

Multiple Choice

If it becomes known after reporting date that a debtor is now not able to pay a material amount that is owed to the reporting entity,the appropriate action according to AASB 110 is to:

• A) Adjust the balance of accounts receivable and write off the bad debt and make a note disclosure that this event occurred after reporting date.
• B) Adjust the balance of accounts receivable and write off the bad debt.
• C) Disclose the event in the notes to the accounts.
• D) Do nothing this period but write the debt off in the accounts for the next period.
• E) None of the given answers.