An Example of a Type II Subsequent Event Includes the Settlement

question 29

True/False

An example of a Type II Subsequent Event includes the settlement two months after year-end of a liability for an amount well in excess of the amount that was accrued at year-end.

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Definitions:

Fiscal Years

A one-year period that companies and governments use for financial reporting and budgeting, differing from the calendar year.

Maturity Value

The amount payable to an investor at the maturity date of a financial instrument, typically the principal plus any final interest payments.

60-Day Note

A type of short-term debt where the repayment is due 60 days after issuance.

360-Day Year

An accounting simplification that assumes there are 360 days in a year to facilitate easier interest calculations.