Which of the following subsequent events would represent an event that provides information about conditions that arose following the date of the financial statements?
A)Settlement of long outstanding litigation.
B)Collection of a past due accounts receivable.
C)Loss of inventory as a result of a flood.
D)An additional tax assessment on prior income.

Question

Quizplus · Accepted Answer

Loss of inventory as a result of a flood is an example of a subsequent event that provides information about conditions that arose after the date of the financial statements, as it is an event that occurred following the financial statement date and could not have been anticipated based on conditions existing at that time.

Which of the Following Subsequent Events Would Represent an Event