Which of the following material events occurring subsequent to the balance sheet date would require an adjustment to the financial statements before they could be issued?
A)Loss of a plant as a result of a flood
B)Sale of long-term debt or capital stock
C)Settlement of litigation in excess of the recorded liability
D)Major purchase of a business that is expected to double the sales volume

Question

Quizplus · Accepted Answer

The settlement of litigation in excess of the recorded liability provides additional evidence about conditions that existed at the balance sheet date, requiring an adjustment to the financial statements.

Which of the Following Material Events Occurring Subsequent to the Balance