Which of the following statements best describes a subsequent event?
A) A subsequent event affects only subsequent reporting periods.
B) A subsequent event may occur any time after financial statements are issued.
C) A subsequent event is, in some cases, reflected in the statements of the preceding period.
D) A subsequent event is not covered by the independent auditor's report.

Question

Quizplus · Accepted Answer

A subsequent event is an event that occurs after the balance sheet date but before the financial statements are issued or available to be issued. In some cases, these events provide additional information about conditions that existed at the balance sheet date and may require adjustments to the financial statements of the preceding period.

Which of the Following Statements Best Describes a Subsequent Event