If an Adjusting Event That Occurs After Balance Sheet Date

question 22

Multiple Choice

If an adjusting event that occurs after balance sheet date is considered to be immaterial,AASB 110 requires that the entity:

• A) must disclose the nature of the event and a statement that an estimate of the financial effects cannot be made.
• B) must recognise the event at balance date.
• C) need not recognise nor disclose the event.
• D) must recognise the event at balance date and need not recognise nor disclose the event.
• E) None of the given answers.

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Definitions:

Salaries Expense

The total amount paid to employees for services rendered during a specific period, often considered an operating expense.

Federal Income Taxes Payable

The amount of income tax a company or individual owes to the federal government, which is due within the tax filing period.

Current Liabilities

Short-term financial obligations that are due within one year or within the normal operating cycle of a business, whichever is longer.

Unearned Revenues

Income received by a company for goods or services that have yet to be provided, recorded as a liability on the balance sheet.