Once the final outcome of a transaction or event occurs _______.
A)it is expected that there will be a difference between the outcome of the accounting estimate and the amount originally recognized or disclosed in the financial statements
B)it is expected that there will be no difference between the outcome of the accounting estimate and the amount originally recognized or disclosed in the financial statements
C)the amount should be adjusted to match the estimated balance
D)the auditor should not concern themselves with investigating abnormally large variances

Question

Quizplus · Accepted Answer

Accounting estimates are predictions about future events that can't be known with certainty at the time of preparing financial statements. Once the actual outcome of a transaction or event is known, it is expected that there will be differences between the estimated amounts and the actual results, as the estimates are based on assumptions and judgments made at a point in time.

Once the Final Outcome of a Transaction or Event Occurs