Management of Utopia Ltd Has Become Aware After Reporting Date

question 35

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 impact of the customer's insolvency.
• C) No reporting about the event is required.
• D) The directors are required to disclose the event in the Directors' Declaration.
• E) None of the given answers.

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Definitions:

Great Spirit

A central figure in various Indigenous religions in North America, often conceived as a supreme deity or spiritual force that oversees the universe.

Pontiac

A leader and war chief of the Ottawa tribe, best known for his role in Pontiac's Rebellion (1763–1766), which sought to resist British military occupation of the Great Lakes region.

Pontiac's Rebellion

A conflict between Native American tribes and the British military forces in the Great Lakes region (1763-1766), led by Chief Pontiac, aiming to drive the British out of the territory.

Proclamation of 1763

An edict issued by King George III following Great Britain's acquisition of French territory in North America after the end of the French and Indian War, forbidding settlements west of the Appalachian Mountains.