Which One of the Following Material Events Occurring Subsequent to the Balance

question 86

Multiple Choice

Which one of the following material events occurring subsequent to the balance sheet date would require an adjustment to the financial statements before they could be issued?

• A) major purchase of a business that is expected to double the sales volume
• B) settlement of litigation in excess of the recorded liability
• C) sale of long-term debt or capital stock
• D) loss of a plant as a result of a flood

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Definitions:

Phobias

An intense, irrational fear of specific objects, situations, or activities that poses little to no actual danger.

Exposure Therapy

A psychological treatment method that involves confronting feared or traumatic memories, objects, or situations directly to reduce their associated anxiety.

Obsessive-Compulsive Disorder

A psychiatric condition marked by persistent, intrusive thoughts (obsessions) and repetitive actions (compulsions).

Systematic Desensitization

A behavioral therapy technique used to gradually reduce anxiety or phobia by having the patient confront a feared object or context in a controlled manner.