Which of the Following Events Is Not a Past Event

question 1

Multiple Choice

Which of the following events is not a past event generating a liability?

• A) Purchase of raw materials on credit
• B) Receipt of a bank loan
• C) Acquisition of goods paid on delivery
• D) Receipt of prepayment for services

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Definitions:

Operating Divisions

Distinct segments within a company, each responsible for certain operational aspects or market services.

Adjustment

A change made to the book value of an asset or liability to accurately reflect its value.

Subsidiary

A company that is completely or partly owned and partly or wholly controlled by another company.

FIFO Inventory Reporting

An approach to reporting inventory where the oldest stock is recorded as sold first; reiterates the First-In, First-Out method in financial statements.