Which of the Following Material After-Reporting-Date Events Is Not Considered

question 25

Multiple Choice

Which of the following material after-reporting-date events is not considered an adjusting event?

• A) determination after the reporting date of the cost of assets purchased before the reporting date
• B) receipt of information after reporting date indicating that an asset was impaired at reporting date
• C) determination after the reporting date the amount of bonus payment payable to senior executives
• D) destruction of assets due to flood after the reporting date

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Definitions:

IRR

Internal Rate of Return - a financial metric used to evaluate the profitability of potential investments, representing the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Salvage Value

The estimated residual value of an asset at the end of its useful life, often considered in depreciation calculations and asset disposal decisions.

Sunk Cost

Expenses that have already been incurred and cannot be recovered, and should not influence future business decisions.

Basic Overheads

The routine, essential expenses incurred in the operation of a business, such as rent, utilities, and salaries.