Which of the Following Would Not Be Considered a Subsequent

question 77

Multiple Choice

Which of the following would not be considered a subsequent event to financial statements?

• A)A major customer declares bankruptcy subsequent to the balance sheet date,but prior to issuing the statements.This event was not considered on the balance sheet date.
• B)A major purchase of a subsidiary to the balance sheet date,but prior to issuing the statements.
• C)Substantial debt incurred subsequent to the balance sheet date,but prior to issuing the statements.
• D)Substantial stock issued subsequent to the balance sheet date,but prior to issuing the statements.
• E)Hiring of employees for a new store,subsequent to the balance sheet date,but prior to issuing the statements.

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Definitions:

Electrical Cost

The expense incurred from the consumption of electricity by a business or home.

Curvilinear Fashion

A term describing a line or relationship that curves in a smooth, non-linear manner, indicating a complex relationship between variables.

Fixed Costs

Expenses that do not change in total despite fluctuations in the level of production or sales activities, such as rent, salaries, and insurance.

High-Low Method

A technique used in managerial accounting to estimate fixed and variable costs based on the highest and lowest levels of activity.