A Friend Comes to You with a Set of Financial

question 54

Essay

A friend comes to you with a set of financial statements that he thinks contains an error.The footnotes contain a note on a bond issue sold after the end of the reporting period.Your friend is sure this is an error because the transaction occurred after the cutoff date for the financial statements.
Required:
Explain to your friend why certain items that occur after the end of an accounting period are included in the financial statements and the manner in which they can be disclosed.

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Definitions:

Endorphin Release

The process through which the body's natural painkillers, endorphins, are released, often in response to stress or exercise, producing a feeling of well-being.

Motor Responses

Bodily reactions and movements that are the result of processing information through the nervous system, often in response to environmental stimuli.

Brief Euphoria

A short-lived feeling of intense happiness or well-being.

Electrical Signals

Rapid changes in voltage across cell membranes, used for communication within and between neurons.