Which of the Following Events Occurring After the Reporting Date

question 12

Multiple Choice

Which of the following events occurring after the reporting date but before the financial report is authorised for issue is NOT an example of an adjusting event?

• A) a decline in the market value of a listed security;
• B) the notification of the insolvency of a debtor;
• C) an event that indicates that the going concern basis of accounting may not be appropriate;
• D) the sale of inventories after the reporting date for an amount below cost.

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Definitions:

Journal

A log where every financial transaction is first recorded in the order of occurrence.

Total Liabilities

The sum of all financial obligations a company owes to outside parties, including loans, bonds payable, and accounts payable.

Ledger

A book or other collection of financial accounts of a particular type, where transactions are recorded.

Normal Balances

The side (debit or credit) of an account that is increased, reflecting the account's natural balance.