If an Entity Had Litigation Pending at the Date of the Financial

question 32

Multiple Choice

If an entity had litigation pending at the date of the financial statements and auditors learn of the outcome of this litigation following the date of their report (but prior to the audit report release date) ,this is known as a(n) :

• A)Omitted procedure.
• B)Prior period adjustment.
• C)Subsequent event.
• D)Subsequently discovered fact.

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Definitions:

Note Payable

A written promissory note in which the borrower agrees to pay back a specified sum to the lender at a future date, with interest.

Unearned Fees

Income received by a business for services that have yet to be performed or delivered, considered a liability until the service is completed.

Unearned Revenue

Money received by a company for goods or services that have yet to be provided to the customer.

Accrued Wages

Salaries or wages that have been earned by employees but have not yet been paid by the company.