A disclosure note about subsequent events for a company that has a December 31, 20X1 year-end and issues financial statements on March 1, 20X2 would not include: 1. A change in depreciation method in February, 20X2. 2. An issuance of stock on February 20, 20X2. 3. An acquisition of another company in February 20X2. 4. A major litigation was settled in favor of the company in January 20X2. 5. An issuance of bonds on March 5, 20X2. 6. Significant restructuring involving major workforce reduction in January, 20X2.
A disclosure note about subsequent events for a company that has a December 31, 20X1 year-end and issues financial statements on March 1, 20X2 would not include: 1. A change in depreciation method in February, 20X2. 2. An issuance of stock on February 20, 20X2. 3. An acquisition of another company in February 20X2. 4. A major litigation was settled in favor of the company in January 20X2. 5. An issuance of bonds on March 5, 20X2. 6. Significant restructuring involving major workforce reduction in January, 20X2.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:A disclosure note about subsequent events for a company that has a December 31, 20X1 year-end
and issues financial statements on March 1, 20X2 would not include:
1. A change in depreciation method in February, 20X2.
2. An issuance of stock on February 20, 20X2.
3. An acquisition of another company in February 20X2.
4. A major litigation was settled in favor of the company in January 20X2.
5. An issuance of bonds on March 5, 20X2.
6. Significant restructuring involving major workforce reduction in January, 20X2.
O 4 & 6
O 1 & 5
O 1,4 & 6
O 2 & 3
Expert Solution
Step 1
Subsequent events are those transactions/events which occurred after the closing of reporting period but before the issuance of financial statements.
There are some events which requires an adjustment in the balances of financial statements or requires only disclosure in notes.
Those which requires an adjustment are known as adjusting events.
Those which requires only disclosure in notes are known as non adjusting events.
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