Events After the Reporting Date Are of Two Types

question 12

Multiple Choice

Events after the reporting date are of two types:
Type 1 Those that provide new evidence about conditions that existed at the reporting date
Type 2 Those that relate to new conditions arising after the reporting date
Which of the following statements is correct?

• A) Only type 1 events affect the figures in the financial statements of the previous period
• B) Only type 2 events affect the figures in the financial statements of the previous period
• C) Both type 1 and type 2 events affect the figures in the financial statements of the previous period
• D) Neither type 1 nor type 2 events affect the figures in the financial statements of the previous period

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Definitions:

Capital Goods

Capital goods are tangible assets such as buildings, machinery, and equipment that a business uses to produce goods or services.

Marginal Opportunity Cost

The loss of potential gain from other alternatives when one alternative is chosen, especially in the context of resource allocation.

Production Possibilities Schedule

A table that shows the different combinations of two goods that can be produced with fixed resources and technology.

Tanks

Armored combat vehicles with heavy firepower and strong defensive capabilities, primarily used by military forces in ground warfare.