Norris Company Settled a Lawsuit in February for an Amount

question 34

Multiple Choice

Norris Company settled a lawsuit in February for an amount that was significantly different from the amount that was originally accrued as an estimate of potential loss. The company's year-end is December 31 and its financial statements are issued in March. This is an example of

• A) A subsequent event that must be disclosed, but because it happened after the balance sheet date no adjustment is needed.
• B) A subsequent event that provided evidence of a condition that did not exist at the balance sheet date.
• C) A subsequent event that need not be disclosed because it did not occur before the company's yearend.
• D) A subsequent event that provided further evidence of conditions that existed on the balance sheet.

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Definitions:

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