Which of the Following Events Occurring After the Reporting Date

question 4

Multiple Choice

Which of the following events occurring after the reporting date may need to be disclosed in the financial statements of a business for that previous period?

• A) The bankruptcy of a major debtor
• B) A loss caused by fire or flood
• C) The announcement of a business merger
• D) All of the above may need to be disclosed

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Definitions:

Opportunity Cost

The cost of forgoing the next best alternative when making a decision or choosing between multiple options.

Voluntary Exchange

is a transaction where parties trade goods or services by mutual agreement, each benefiting from the exchange.

Private Property Rights

The legal rights to possess, use, and dispose of assets such as land, buildings, or personal items, protected under the law.

Comparative Advantage

The ability of a country or individual to produce a good or service at a lower opportunity cost than another.