Which of the Following Post-Balance-Sheet Events Would Generally Require Disclosure

question 52

Multiple Choice

Which of the following post-balance-sheet events would generally require disclosure, but no adjustment of the financial statements?

• A) Retirement of the company president
• B) Settlement of litigation when the event that gave rise to the litigation occurred prior to the balance sheet date.
• C) Employee strikes
• D) Issue of a large amount of capital stock

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Definitions:

MC = P

A condition in economic theory where Marginal Cost (MC) equals Price (P), indicating optimal production levels where no additional units should be produced.

Profit

The financial gain obtained when the total revenues generated exceed the total costs incurred by a business.

Marginal Cost

The growth in total expenses incurred from the production of one more unit.

Output

The total amount of goods or services produced by a firm or country.