Which Event That Occurred After the End of the Financial

question 60

Multiple Choice

Which event that occurred after the end of the financial year under audit but prior to issuance of the auditor's report would NOT require disclosure in the financial statements?

• A) Loss of plant or inventories as a result of fire or flood
• B) Sale of a bond or share issue
• C) A major drop in the quoted market price of the shares of the corporation
• D) Settlement of litigation when the event giving rise to the claim took place after the balance sheet date

Grasp the concept of merchandise inventory, its reporting, and its role in a merchandising company's operating cycle.

Learn the importance of sales terms and conditions, including the FOB shipping point and destination, purchase discounts, allowances, and returns in managing revenues and expenses.

Understand the calculation and interpretation of financial ratios like the gross margin ratio to evaluate a company's operational efficiency.

Understand the factors influencing the strategic expansion of manufacturing capacity, including location analysis.

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Definitions:

Direct Materials

Raw materials that can be directly identified and easily traced to the manufacturing of a product.

Indirect Material

Materials used in the support of the production process but not directly a part of the finished product.

Period Cost

Costs that are expensed in the period in which they are incurred, not directly tied to the production of goods or services.

Goals Met

A term indicating the achievement of predefined objectives or targets.