Type I subsequent events Provide two examples of a Type I subsequent event and explain how these events would be treated in the financial statements
The instructor must review the student's responses, as they may vary.
Examples may include, but are not exclusive to:
1 . Large customers who file for bankruptcy.
2 . Settled contingencies and other liabilities.
3 . Disposal of material property or equipment for a significant loss.
Type I subsequent events reflect conditions existing as of the balance sheet date. All of the above require adjustments to estimates before the financial statements are finalized.
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