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blondinia [14]
2 years ago
7

Big and Tall, CPAs, were auditing Mountain Corporation for the year ended December 31, 2019. On January 15, 2020, a major custom

er of Mountain Corporation declared bankruptcy as the result of an uninsured loss due to a major fire in their warehouse on January 10, 2020. As a result, a material accounts receivable from the customer was determined to be uncollectible. Big and Tall, CPAs, would expect the client to:________.
A. Record the loss on uncollectible accounts as a routine transaction in the year 2020.
B. Treat the loss as a subsequent event and adjust the 2019 financial statements to record the loss on uncollectible accounts.
C. Treat the loss as a subsequent event and provide a footnote about the loss in the 2019 financial statements.
D. File a lawsuit against the customer in hopes of collecting some of the money owed to the client.
Business
1 answer:
AURORKA [14]2 years ago
4 0

Answer:

The correct answer is Option B.

Explanation:

Based on IAS 10 Events after the Reporting Period, subsequent events can be an adjusting event or non-adjusting event. If it is an adjusting event, it means an event after the reporting date before the audited financial statements are signed that provides further evidence of conditions that existed at the reporting date. However, non-adjusting events are events after the reporting date that are indicative of a condition that arose after the reporting date, this requires disclosure in the financial statements while for adjusting events, the financial statements are adjusted for condition that arose after the reporting date.

The declaration of the customer as bankrupt is an adjusting event since it affects the receivable collection, hence the need to adjust it as uncollectible,

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madreJ [45]

Answer: E- understanding your customer

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Most organisation do not take marketing research serious thereby cutting any budget set aside for this purpose. For a marketing research to be effective, there are processes to be followed and they are:

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8 0
3 years ago
Smith Company gives the following information on the financial statements: Net Income $50,000 Preferred Dividends 8,000 Average
ch4aika [34]

Answer: The rate of return on common stockholder’s equity is 23%.

Explanation:

Given that,

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5 0
2 years ago
A. True
ankoles [38]
What is the original statement?

5 0
3 years ago
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3 0
2 years ago
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zubka84 [21]

Answer:

The correct answer is <em>The site will have all of the company’s applications.</em>

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