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Which of the following events requires an adjustment to the financial statements for the year ended December 31?
Loss on an uncollectible account due to a natural disaster.
Sale of a major bond issue shortly after year-end.
Loss due to bankruptcy filing by a customer.
Implantation of a new accounting policy.
The correct answer is: Loss due to bankruptcy filing by a customer.
The appropriate event that requires an adjustment to the financial statements for the year ended December 31 is the loss due to bankruptcy filing by a customer. This event provides evidence about conditions that existed at the balance sheet date. When a customer files for bankruptcy, it indicates that the customer may not be able to pay their outstanding debts, directly impacting the collectability of accounts receivable. Consequently, this would necessitate an adjustment to the allowance for doubtful accounts, reflecting the higher likelihood of uncollectibility based on the condition of the customer as of year-end. In contrast, the other events described do not typically result in adjustments to the financial statements for the prior year. Loss on an uncollectible account due to a natural disaster may inform future estimates and assessments but does not alter the facts of customer accounts that existed on December 31. The sale of a major bond issue shortly after year-end is an event that occurs after the reporting period and therefore affects future financials rather than the ones already closed. Finally, the implementation of a new accounting policy does not necessitate an adjustment to past financial statements; rather, it typically involves a change in how future transactions are recorded and reported.