快速查题-Chapter20-23试题

The financial statements of Overexposure Co for the year ended 31 December 20X1 are to be approved

on 31 March 20X2. Before they are approved, the following events take place.

1 On 14 February 20X2 the directors took the strategic decision to sell their investment in Quebec Co despite the fact that this investment generated material revenues.

2 On 15 March 20X2, a fire occurred in the eastern branch factory which destroyed a material amount of inventory. It is

estimated that it will cost $505,000 to repair the significant damage done to the factory.

3 On 17 March 20X2, a customer of Overexposure Co went into liquidation. Overexposure has been advised that it is unlikely

to receive payment for any of the outstanding balances owed by the customer at the year end.

How should these events reflected in the financial statements at 31 December 20X1?

Adjust                       Disclose                           Do nothing

Which of the following events between the reporting date and the date the financial statements are authorised for issue must

be adjusted in the financial statements?

1 Declaration of equity dividends

2 Decline in market value of investments

3 The announcement of changes in tax rates

4 The announcement of a major restructuring

Which of the following is the correct definition of an adjusting event after the reporting period?

If a material event occurs after the reporting date but before the financial statements are authorised for issue outside the

organisation, and this event does NOT require adjustment, what information should be disclosed in the financial statements?

Which of the following items could appear in a company's statement of cash flows?

1 Surplus on revaluation of non-current assets

2 Proceeds of issue of shares

3 Proposed dividend

4 Irrecoverable debts written off

5 Dividends received