An Example of a Type I Subsequent Event Is

question 66

Multiple Choice

An example of a Type I subsequent event is:

• A)a tornado that destroys an entity's factory after the balance sheet date.
• B)an event after the balance sheet date that confirms the auditor's belief (documented prior to the end of the entity's fiscal year)that a large portion of the entity's inventory is obsolete.
• C)notification of an IRS audit after the balance sheet date.
• D)the entity's Board of Directors unexpectedly resigns after the balance sheet date.

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Definitions:

Positive

Characterized by or displaying affirmation, agreement, or constructive qualities or results.

Relationship

How two or more ideas, objects, or persons are related, or the status of being in relation.

Correlation Coefficient

A statistical measure that calculates the strength and direction of a linear relationship between two variables.

Continuous

A type of data or function that can take any value within a given range, without any breaks or discrete jumps.