Day: October 12, 2022

A company’s year end is 30 June 2015.

The following events took place after the year-end:

• On 27 July 2015 a major fire took place at the company’s factory.
• On 8 August 2015 a major trade receivable at 30 June 2015 went into liquidation.

In accordance with SSAP 17, Accounting for post balance sheet events, how should the two events be treated in the financial statements?

Select ONE answer:

1. fire – accrued in accounts & trade receivable liquidation – accrued in accounts
2. fire – accrued in accounts & trade receivable liquidation – disclosed in notes
3. fire – disclosed in notes & trade receivable liquidation – accrued in accounts
4. fire – disclosed in notes & trade receivable liquidation – disclosed in notes

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct
4. Not correct

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