Which one of the following best defines an external event in terms of accounting?
A)A measured event that must be recognized
B)An event recognized in a set of financial statements
C)A happening of consequence to an entity
D)An interaction between an entity and its environment

Question

Quizplus · Accepted Answer

An external event is an interaction between an entity and its environment, such as a transaction with a customer or a purchase from a supplier. It is an event that occurs outside of the entity and has an impact on its financial position and performance. This definition distinguishes external events from internal events, which occur within the entity and are not relevant for accounting purposes unless they result in financial transactions or changes.

Which One of the Following Best Defines an External Event