The requirements for Type I and Type II subsequent events are
A)Type I events are disclosed in the financial statements
B)Type II events are disclosed in the financial statements
C)neither Type I nor Type II events are recorded in the financial statements
D)Type II events are recorded in the financial statements
E)Type I events are recorded in the financial statements
F)both A and B
G)both B and E
H)both C and D

Question

Quizplus · Accepted Answer

Type II subsequent events are events that occur after the balance sheet date but before the financial statements are issued. These events are disclosed in the financial statements but not recorded. Type I subsequent events are events that occur before the financial statements are issued and are both disclosed and recorded in the financial statements. Therefore, both statements B and E are true, making option G the best choice.

The Requirements for Type I and Type II Subsequent Events