Management of Utopia Ltd Has Become Aware After Reporting Date

question 38

Multiple Choice

Management of Utopia Ltd 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 AASB 110,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' Declaration.

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Definitions:

Civil Rights

The rights of citizens to political and social freedom and equality, often protected by the law.

Secluded

Being isolated or hidden away from the view and company of others, often implying a quiet or private space.

Team Meeting

A gathering of individuals working together, typically within a professional context, to discuss progress, plan strategies, or address issues related to their common objectives.

Duty Of Care

A legal obligation imposed on an individual requiring adherence to a standard of reasonable care while performing any acts that could foreseeably harm others.