Which of the following situations would require adjustment to or disclosure in the financial statements?
A) A merger discussion
B) The application for a patent on a new production process
C) Discussions with a customer that could lead to a 40 percent increase in the client's sales
D) The bankruptcy of a customer who regularly purchased 30 percent of the company's output

Question

Quizplus · Accepted Answer

The bankruptcy of a customer who regularly purchased 30 percent of the company's output would have a significant impact on the company's financial statements and would need to be disclosed or adjusted for. The other situations listed may be important information for investors or stakeholders to know, but they do not necessarily require adjustment to or disclosure in the financial statements.

Which of the Following Situations Would Require Adjustment to or Disclosure