Adjust the financial statements on posting balance sheet

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Theory question on posting Balance Sheet events.

Post-Balance-Sheet Events

For each of the following subsequent (post-balance-sheet) events, indicate whether a company should (a) adjust the financial statements, (b) disclose in notes to the financial statements, or (c) neither adjust nor disclose.

a) Settlement of federal tax case at a cost considerably in excess of the amount expected at year-end.

b) Introduction of a new product line.

c) Loss of assembly plant due to fire.

d) Sale of a significant portion of the company's assets.

e) Retirement of the company president.

f) Prolonged employee strike.

g) Loss of a significant customer.

h) Issuance of a significant number of shares of common stock.

i) Material loss on a year-end receivable because of a customer's bankruptcy.

j) Hiring of a new president.

k) Settlement of prior year's litigation against the company.

l) Merger with another company of comparable size.

Reference no: EM139595

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