If It Becomes Known After Reporting Date That a Debtor

question 12

Multiple Choice

If it becomes known after reporting date that a debtor is now not able to pay a material amount that is owed to the reporting entity,the appropriate action according to IAS 10 is to:

• A)Adjust the balance of accounts receivable and write off the bad debt and make a note disclosure that this event occurred after reporting date.
• B)Adjust the balance of accounts receivable and write off the bad debt.
• C)Disclose the event in the notes to the accounts.
• D)Do nothing this period but write the debt off in the accounts for the next period.

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Definitions:

Witchcraft

The practice of magical skills, spells, and abilities, often associated with the exercise of supernatural powers.

Exorcism

A religious or spiritual ritual intended to cast out a demon or spirit from a person or area.

Psychotic

Relating to psychosis, characterized by an impaired relationship with reality, which may include delusions and hallucinations.

Allen Memorial Hospital

A psychiatric hospital associated with McGill University in Montreal, Canada, known for its historical involvement in controversial brainwashing experiments during the 1950s and 1960s.