Type II Subsequent Events Are Conditions That Require an Adjustment

question 14

True/False

Type II subsequent events are conditions that require an adjustment to the account balance shown on the financial statements.

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Definitions:

Cost Method

An accounting method used to record investments in which the investment is recorded at its acquisition cost without recognizing subsequent changes in market value.

Investment Method

A technique for recognizing the investor's share of investee profits and adjusting the carrying amount of the investment accordingly.

Accounting

The systematic process of recording, summarizing, and reporting the financial transactions and positions of a company.

Available-for-sale

This is a classification for investments that a company plans to sell but are not actively traded, with changes in value reported in other comprehensive income.