Reference no: EM139595
Theory question on posting Balance Sheet events.
Post-Balance-Sheet Events
For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.
a) Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.
b) Introduction of a new product line.
c) Loss of assembly plant due to fire.
d) Sale of a significant portion of the company's assets.
e) Retirement of the company president.
f) Prolonged employee strike.
g) Loss of a significant customer.
h) Issuance of a significant number of shares of common stock.
i) Material loss on a year-end receivable because of a customer's bankruptcy.
j) Hiring of a new president.
k) Settlement of prior year's litigation against the company.
l) Merger with another company of comparable size.
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