If an Event or Transaction That Occurs After Reporting Date

question 9

Multiple Choice

If an event or transaction that occurs after reporting date does not relate to conditions that existed at reporting date then:

• A) No action should be taken to report the event or transaction in the financial reports.
• B) The balance sheet should not be adjusted but effects on the income statement should be reflected in that statement.
• C) The event or transaction should be disclosed in the notes to the accounts as a post-reporting date event and the financial statements adjusted appropriately.
• D) The event or transaction should be disclosed in the notes to the accounts if it is material.
• E) None of the given answers.

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Definitions:

Information System

An organized system for the collection, organization, storage, and communication of information; it typically involves people, technology, and processes.

Information Centralization

The practice of gathering and managing all relevant information within a single, centralized database or system to improve accessibility and decision-making.

Current Inventory

The existing stock of goods held by a business meant for sale or production.

Continuous Review Policy

A inventory management approach where stock levels are constantly monitored, triggering reorders as needed.