Which of the following situations would require adjustment to or disclosure in the financial statements?
A. A merger discussion.
B. The application for a patent on a new production process.
C. Discussions with a customer that could lead to a 40 percent increase in the entity's sales if agreement is successful.
D. The bankruptcy of a customer who regularly purchased 30 percent of the company's output.
Answer: The bankruptcy of a customer who regularly purchased 30 percent of the company's output.
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