Adjusting events after the reporting period:
A)reveal for the first time a condition that existed at reporting date
B)provide additional evidence that assists in determining the amount of an item which was uncertain at reporting date
C)both A and B
D)involve the creation of new conditions that did not exist at reporting date

Question

Quizplus · Accepted Answer

Adjusting events after the reporting period may either reveal for the first time a condition that existed at the reporting date (as in choice A) or provide additional evidence that assists in determining the amount of an item which was uncertain at the reporting date (as in choice B). The correct answer is choice C because adjusting events may include both scenarios. Adjusting events do not involve the creation of new conditions that did not exist at the reporting date (as in choice D), as this would be considered a non-adjusting event.

Adjusting Events After the Reporting Period