The Following Events All Occurred After the Balance Sheet Date

question 17

Multiple Choice

The following events all occurred after the balance sheet date of 30 June 2012, but prior to the date of the audit report, 15 August 2012. Which one would require an adjustment to the account balances as at 30 June 2012?

• A) The auditee will market $2 million of preference shares on 31 July, 2012.
• B) Unused equipment recorded at $100 000 at 30 June, 2012 was disposed of on 3 July, 2012 for $60 000.
• C) The client disposed of a major subsidiary on 30 July 2012.
• D) Inventory valued at $100 000 on 30 June, 2012 was destroyed by a fire on 1 August, 2012.

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Definitions:

-Al

A suffix meaning related to or pertaining to, used in the formation of adjectives.

Somatotrophic

Pertaining to or promoting somatic growth, often referred to in context with growth hormone that stimulates growth, cell reproduction, and cell regeneration.

Troph

A suffix indicating growth, development, or nourishment, often used in biological contexts.

Transverse Plane

An imaginary plane that divides the body into upper and lower parts.