Which of the Following Would Be a Type II Subsequent

question 90

Multiple Choice

Which of the following would be a Type II subsequent event?

• A)Information becomes available that provides evidence about the valuation of an estimate or reserve that had been accrued at year end.
• B)A sale of inventory below carrying value provides evidence that the net realizable value was less than cost at year end.
• C)A stock dividend or split that takes place during the subsequent period should be disclosed.In addition,earnings-per- share figures should be adjusted to show the retroactive effect of the stock dividend or split.
• D)A material change occurs in the value of investment securities after the balance sheet date.

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Definitions:

Profit Allocation

The process of distributing a company's earnings among its shareholders, partners, or other stakeholders according to agreed-upon terms.

Preponderance Of Evidence

A standard of proof in civil cases, requiring that a claim be more likely true than not true.

De Jure Corporation

Latin for “lawful corporation” a corporation that has met the mandatory statutory provisions and thus received its certificate of incorporation.

De Facto Corporation

A company that acts like a corporation and enjoys some of its benefits, despite not being duly incorporated according to statutory requirements.