Which of the Following Subsequent Events Might Require an Adjustment

question 54

Multiple Choice

Which of the following subsequent events might require an adjustment to the client's financial statements?

• A)A business combination with another company.
• B)A major customer declares bankruptcy causing a material receivable to be uncollectible.
• C)Loss of plant and equipment due to a fire.The loss in insured.
• D)Plant employees could possibly go on strike.

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Definitions:

Nutritional Content

Nutritional content refers to the composition of nutrients such as vitamins, minerals, fats, proteins, and carbohydrates in a food item.

Asymmetric Information

A situation where one party in a transaction has more or better information than the other party.

Smart Phone App

A smartphone app is a software application designed to run on smartphones, offering various functionalities ranging from utility and entertainment to productivity and social networking.

Adverse Selection

A situation where asymmetric information leads to the selection of poor risks or unwanted results, commonly discussed in insurance markets and financial services.