AASB 110 Specifies That Adjusting Events Should Be Considered Against

question 49

Multiple Choice

AASB 110 specifies that adjusting events should be considered against two criteria to determine their treatment.The two criteria are:

• A) (a) provides an indication that conditions may have existed at reporting date; or (b) reveals additional solid evidence of a condition that existed at reporting date.
• B) (a) provides additional evidence of conditions that existed at the date the audit report was signed; or (b) reveals for the first time a condition that existed at date of completion.
• C) (a) provides an indication that conditions may have existed at date of completion; or (b) reveals additional solid evidence of a condition that existed at date of completion.
• D) (a) provides additional evidence of conditions that existed at reporting date; or (b) reveals for the first time a condition that existed at reporting date.

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Definitions:

Secondarily Liable

Someone who is secondarily liable holds responsibility to fulfill an obligation if the primary party fails to do so, commonly seen in guarantor or co-signer financial arrangements.

Payable

Refers to money that is owed by a person or company and must be paid to another party.

Obligation

A legal or moral duty to do or not do something, often with legal implications if not fulfilled.

Indorses

Refers to the act of signing the back of a financial document, thus transferring rights or ownership.