Which of the Following Situations Would Require Adjustment to or Disclosure

question 63

Multiple Choice

Which of the following situations would require adjustment to or disclosure in the financial statements?

• A)A merger discussion.
• B)The application for a patent on a new production process.
• C)Discussions with a customer that could lead to a 40 percent increase in the entity's sales if agreement is successful.
• D)The bankruptcy of a customer who regularly purchased 30 percent of the company's output.

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Definitions:

Personality

The amalgamation of features that constitute a person's distinct identity.

Health

A state of complete physical, mental, and social well-being, not merely the absence of disease or infirmity.

Biological

Pertaining to the science of life or living organisms, encompassing their structure, function, growth, origin, evolution, and distribution.

Behavioral

Pertaining to the actions or reactions of persons or things in response to external or internal stimuli.