A Subsequent Event for an Entity with a December 31,2016,year-End

question 41

Multiple Choice

A subsequent event for an entity with a December 31,2016,year-end would not include:

• A)A change in the estimated useful lives of equipment in January 2017.
• B)An issuance of bonds in January 2017.
• C)An acquisition of another company in January 2017.
• D)A major uncertainty at December 31,resolved in January 2017.

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Definitions:

Liabilities

Economic obligations of the company, such as money owed to lenders, suppliers, and employees.

Days Sales Outstanding (DSO)

A financial measure that indicates the average number of days it takes a company to collect payment after a sale has been made.

Goodwill

An intangible asset that arises when a business is acquired for more than the fair value of its net identifiable assets, often attributed to brand reputation, customer relationships, and intellectual property.

Book Value

The value of a company or asset according to its financial statements, calculated as total assets minus intangible assets (patents, copyrights) and liabilities.