If the Date of an Entity's Financial Statements Is December

question 13

Multiple Choice

If the date of an entity's financial statements is December 31, the date of the auditor's report is February 20, and the audit report release date is February 22, which of the following is considered a subsequent event?

• A)A significant acquisition that was announced on February 1 and will be finalized on October 1.
• B)A court settlement on March 3 related to a case that was pending on December 31.
• C)Losses from the devaluation of a foreign currency that became finalized on February 21.
• D)The entity's announcement of a major restructuring plan on December 30 that will be implemented during the upcoming year.

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Definitions:

Macroeconomic Instability

A condition characterized by large and unpredictable fluctuations in key economic indicators such as GDP, inflation, and unemployment rates.

Aggregate Demand

The total demand for all goods and services within an economy at a given overall price level and in a given time period.

International Oil Prices

The cost per barrel of crude oil as determined on the global market, influenced by factors like supply and demand, geopolitical events, and economic data.

Demand-Management Policy

Government policies aimed at influencing the level of demand in the economy in order to achieve economic objectives like controlling inflation or stimulating growth.