Which of the Following Subsequent Events (Post-Statement of Financial Position

question 51

Multiple Choice

Which of the following subsequent events (post-statement of financial position events) would require adjustment of the accounts before issuance of the financial statements?

• A) major losses as a result of a fire in the company's plant
• B) decline in the fair value of investments
• C) loss on an account receivable (on the books at statement of financial position date) resulting from a customer's bankruptcy
• D) lawsuit arising from a customer's injury due to a defective product

---

Definitions:

Cap-And-Trade

Cap-and-trade is an environmental policy tool designed to reduce pollution by setting a limit (cap) on emissions and allowing businesses to buy, sell, or trade permits for emissions under this cap.

Emission Allowances

Emission allowances are permits or credits that allow the holder to emit a certain amount of pollutants over a set period.

Aggregate Emissions

The total amount of emissions (such as CO2, methane) released into the atmosphere by a specific entity, region, or activity, contributing to environmental impacts like climate change.

Sustainability Initiatives

Practices and strategies companies implement to manage and improve the environmental, social, and economic impacts of their operations.