Which of the Following Is NOT an Example of an Adjusting

question 8

Multiple Choice

Which of the following is NOT an example of an adjusting event under IAS 10 Events after the Reporting Period?

• A) the settlement after reporting date but prior to the date that the financial statements are authorised for issue of a court case which had commenced prior to reporting date;
• B) the sale of inventories after reporting date but prior to the date that the financial statements are authorised for issue for an amount below cost;
• C) uninsured damage to a material item of machinery after reporting date but prior to the date that the financial statements are authorised for issue for an amount below cost;
• D) receipt of advice after reporting date but prior to the date that the financial statements are authorised for issue that a material debtor has been placed in liquidation.

---

Definitions:

Fixed Assets

Long-term tangible property owned by a business that is used in its operations and is not expected to be consumed or converted into cash within a year.

Salaries Payable

The amount of salary expenses that have been incurred by a company but have not yet been paid to employees, classified as a liability.

Operating Activities

Day-to-day actions that relate to producing and delivering a company’s products and services, forming the primary source of revenue.

Future Cash Flows

Future cash flows refer to the estimated monetary inflows and outflows a company expects to receive or pay out in the future, playing a critical role in financial planning and analysis.