Many times a financial analyst may decide to make adjustments to the financial statements in order to make the statements more useful.Which of the following would not require an adjustment to the financial statement?
A) A company signs a new contract with a customer.
B) A delivery company incurs a loss from disposition of used delivery trucks.
C) A company changes the useful life of its equipment from 5 years to 8 years.
D) A company incurs a charge related restructuring its operations.

Question

Quizplus · Accepted Answer

Signing a new contract with a customer would not require an adjustment to the financial statement as it is a normal business activity that would be reflected in the revenue and expenses of the period it occurred in. The other options would require adjustments, such as recognizing the loss on disposition of used delivery trucks, revising the depreciation expense to reflect a change in useful life, or recognizing the charge related to the restructuring in the current period.

Many Times a Financial Analyst May Decide to Make Adjustments