Management of Utopia Plc Has Become Aware After Reporting Date

question 43

Multiple Choice

Management of Utopia Plc has become aware after reporting date that a major customer is insolvent.The customer apparently went into receivership before Utopia's reporting date and owes Utopia a material amount for inventory purchased during the period.According to IAS 10,how should this event be treated in Utopia's financial statements?

• A)The account receivable should be written off.
• B)The event should be disclosed in the notes to the financial statements, including information about the financial effect of the customer's insolvency.
• C)No reporting is required.
• D)The directors are required to disclose the event in the Directors' Report.

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Definitions:

Royal Authority

Refers to the power or right governing a country or territory vested in a king, queen, or monarchy.

Virtual Representation

A British political theory that members of Parliament represented all British subjects, including American colonists, regardless of whether they had directly elected their representatives.

Parliamentary Control

The mechanism by which a parliamentary system of government maintains oversight and authority over the executive branch, ensuring accountability and adherence to the law.

Grenville's Argument

a reference to the rationale used by British Prime Minister George Grenville to justify the imposing of taxes on the American colonies, arguing it was fair to have them contribute to the costs of their own defense.