The Following Events All Occurred After the Balance Sheet Date

question 51

Multiple Choice

The following events all occurred after the balance sheet date (6/30/15) but prior to the auditor's report (9/10/15) . Which one would require an adjustment to the account balances as of 6/30/15?

• A) client will market a new series of equity securities ($2 million of preferred stock) on 8/1/15
• B) unused equipment on the books at 6/30/15 for $100 000 was disposed of 7/31/15 for $60 000
• C) securities costing $30 000 held for temporary investment on 6/30/15 declined in value by one-third when the market took a plunge on 8/15/15
• D) inventory valued at $100 000 on 6/30/15 was destroyed in a fire on 8/1/15

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Definitions:

Human Capital

The stock of knowledge, habits, social and personality attributes, including creativity, embodied in the ability to perform labor so as to produce economic value.

Personal Prejudice

An unfounded or irrational bias towards individuals or groups based on characteristics such as race, gender, religion, or sexual orientation.

Demand for Plumbers

The need or desire for plumbing services in a market, which can vary based on factors like housing development and maintenance requirements.

Construction

The process or industry involved in assembling infrastructure or building structures from individual components.