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:

Milgram Experiment

A psychological experiment conducted by Stanley Milgram in the 1960s to study obedience to authority, where participants were instructed to administer electric shocks to another person.

Stanford University Prison Experiment

A psychological study conducted by Philip Zimbardo in 1971 at Stanford University, where students were assigned roles of prisoners and guards to explore the effects of perceived power.

Generalization

Drawing a conclusion about a certain characteristic of a population based on a sample from it.

Logical Support

The provision of reasons or evidence to justify a claim or argument.