ACCY 131 PG-4a Solutions

ACCY 131 PG-4a Solutions - GroupProblemSet#4(PG4...

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Group Problem Set #4 (PG 4) Instructions: Please respond to the following (three) problems. This group problem set can be (your choice) completed in groups of no more than four students. Please be sure your responses are appropriately formatted and contain no obvious/glaring spelling and grammatical errors. Attach your completed assignment in the submission dropbox and be sure to include all group member names with your submission. 1. (4 points – Ch 16) Auditors must be concerned with events that occur subsequent to the balance sheet date, because the events may need to be reflected in the financial statements. a. Give two examples of Type I subsequent events b. Give two examples of Type II subsequent events ANS: a. One example of a Type I subsequent event would be the settlement of an ongoing lawsuit where the settlement amount is materially different than the previous litigation accrual. A second example of a Type I subsequent event would be the bankruptcy of a significant customer that results in the cancellation or write off of a material A/R balance.
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