The review of subsequent cash receipts has revealed that several of the trade receivables thatwere considered doubtful have now been paid. However, the audit procedures have shownthat a large debtor that was considered safe at 30 June was unexpectedly declared bankrupton 20 July. The year-end for the company is 30 June and the audit report is due to be signed on 20 August.Required:For each of the items above, explain what type of subsequent event it is and the appropriatetreatment of the item in the financial report.
The review of subsequent cash receipts has revealed that several of the trade receivables thatwere considered doubtful have now been paid. However, the audit procedures have shownthat a large debtor that was considered safe at 30 June was unexpectedly declared bankrupton 20 July. The year-end for the company is 30 June and the audit report is due to be signed on 20 August.Required:For each of the items above, explain what type of subsequent event it is and the appropriatetreatment of the item in the financial report.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The review of subsequent cash receipts has revealed that several of the trade receivables that
were considered doubtful have now been paid. However, the
that a large debtor that was considered safe at 30 June was unexpectedly declared bankrupt
on 20 July.
The year-end for the company is 30 June and the audit report is due to be signed on 20 August.
Required:
For each of the items above, explain what type of subsequent event it is and the appropriate
treatment of the item in the financial report.
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