Question

QUESTION 28 2 points Save Answer A client has a calendar year-end. Listed below are four events that occurred after December 31. Which one of these subsequent events might result in adjustment of the December 31 financial statements? sale of a major subsidiary write-off of a substantial portion of inventory as obsolete collection of 90% of the accounts receivable existing at December 31 adoption of accelerated depreciation methods

Answer 1

There are two types of subsequent events that occurs between date of end of financial year and financial statment preparing date.

1.adjustment required

2. non adjusting

writing off substantial portion of inventory as obsolete requires adjustment.

answer b