An Example of a Type I Subsequent Event Is

question 71

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belief (documented prior to the end of the entity's fiscal year) that a large portion of the entity's inventory is obsolete.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:

Socialization

The process by which individuals learn and adopt the norms, values, and behaviors appropriate to their society or culture.

Negatively Reinforced

A process in operant conditioning where a response is strengthened because it leads to the removal of an unpleasant stimulus.

Positively Reinforced

Refers to a behavior that increases in frequency because it is followed by a rewarding stimulus.

Extinguished

In a psychological context, refers to the process by which a conditioned response decreases or disappears after repeated exposure to the conditioned stimulus without reinforcement.