If It Becomes Known After Reporting Date That a Debtor

question 16

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 AASB 110 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:

Beyond Budgeting Model

A management approach that operates without traditional budgeting, focusing on flexible and adaptive management processes.

Performance Targets

Predefined goals set by a company to measure and assess the efficiency, productivity, and success of its activities.

Senior Head Office

The central or main office location where senior management and key corporate functions are based.

Direct Labour-Hours

The total hours worked by employees directly involved in the production of goods or provision of services.