Whenever Subsequent Events Are Used to Evaluate the Amounts Included

question 97

Multiple Choice

Whenever subsequent events are used to evaluate the amounts included in the statements, care must be taken to distinguish between conditions that existed at the balance sheet date and those that come into being after the balance sheet date. The subsequent information should not be incorporated directly into the statements if the conditions causing the change in valuation

• A) took place before the balance sheet date.
• B) did not take place until after the balance sheet date.
• C) occurred both before and after the balance sheet date.
• D) are reimbursable through insurance policies.

---

Definitions:

Sale Received

The funds collected from the sale of goods or services.

Accrued Interest

Interest that has accumulated on a loan or bond since the last payment date but has not yet been paid out.

Commission

A fee paid to an agent or employee for transacting a sale, which is typically a percentage of the sale price.

Accrued Interest

Interest that has accumulated over a certain period but has not yet been paid or received.