A Client Has a Calendar Year- End

question 72

Multiple Choice

A client has a calendar year- end. Listed below are four events that occurred after 31 December. Which one of these subsequent events might result in adjustment of the 31 December financial statements?

• A) Settlement of a litigation for a different amount from that recorded in the accounts
• B) Collection of 90% of the accounts receivable existing at 31 December
• C) Adoption of accelerated depreciation methods
• D) Sale of a major subsidiary

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Definitions:

Social Comparison

The process of comparing oneself to others in order to evaluate or enhance some aspects of the self.

Dissimilar to Ourselves

Describes things or individuals that are vastly different from our own characteristics, experiences, or beliefs.

Risky Shift

A phenomenon where group decisions tend to be more extreme, often riskier, than the initial inclinations of its individual members.

Group Dynamics

Group dynamics refers to the study of behaviors and psychological processes occurring within a social group or between social groups.