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Which of the following is the best example of a Type I subsequent event? ...

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Accounting

Which of the following is the best example of a Type I subsequent event?

a.

The company defaults on its line-of-credit with the bank subsequent to year end but previous to the release of the audit opinion.
b.

The company initiates an initial public offering subsequent to year-end.
c.

A related-party transaction occurs during the course of the audit.
d.

Litigation that was accrued as a liability in the year under audit is settled subsequent to year-end for an amount in excess of estimates.

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