What is Type I subsequent event?
A)An event that provides evidence of conditions that existed at the date of the financial statements.
B)An event occurring between the date of the financial statements and the date of the auditor's report.
C)An event that provides evidence of conditions that arose after the date of the financial statements.
D)An event that does not require an adjustment to the financial statements but may require disclosure in the notes to the financial statements.

Question

Quizplus · Accepted Answer

Type I subsequent event is an event that provides evidence of conditions that existed at the date of the financial statements. These events require an adjustment to the financial statements as they are related to conditions that existed at the time of preparing the financial statements. Examples of Type I subsequent events include a settlement of litigation that was pending at the date of the financial statements or the sale of a portion of a business that was planned at the date of financial statements.

What Is Type I Subsequent Event