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Events that occur after the December 31, 2018 balance sheet date, but before the balance sheet is issued, and provide ad...

Events that occur after the December 31, 2018 balance sheet date, but before the balance sheet is issued, and provide additional evidence about conditions that existed at the balance sheet date and affect the reliability of accounts receivable should be

a.   discussed only in the MD&A (Management's Discussion and Analysis) section of the annual report.

b.   disclosed only in the Notes to the Financial Statements.

c.   used to record an adjustment to Bad Debt Expense for the year ending December 31, 2018

d.   used to record an adjustment directly to the Retained Earnings account

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Answer : c.   used to record an adjustment to Bad Debt Expense for the year ending December 31, 2018

AS

Any event which is adjusting event means provide more evidence to the situation existing on the balance sheet date should be adjusted to account to which it relates before balance sheet date

so here as more evidence we get regarding reliability of accounts receivable so adjustment should be made to bad debt expense before finalization of balance sheet

Hence answer is c.   used to record an adjustment to Bad Debt Expense for the year ending December 31, 2018

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