Subsequent to the Balance Sheet Date but Before the Authorisation

question 41

Multiple Choice

Subsequent to the balance sheet date but before the authorisation date of the financial reports,the dividend to be paid by Hannibal Ltd has been determined.How should this decision be recorded in the financial statements according to AASB 110?

• A) The event should be disclosed in a note to the financial statements.
• B) The event should be fully reflected in the financial statements.
• C) No reporting is required.
• D) The shareholders should be informed by separate letter.
• E) None of the given answers.

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Definitions:

Breakeven

The point at which costs or expenses and income are equal, and there is no net loss or gain.

Mark-up

The amount added to the cost price of goods to cover overhead and profit; a percentage of the cost price.

Breakeven

A financial situation where revenue equals costs, resulting in neither profit nor loss.

Mark-up

The margin calculated by subtracting the cost of a product or service from its sale price, then dividing by the cost, expressed as a percentage.