Final answer:
Option c, Inability to collect from a significant customer, is the best example of a Type II subsequent event because it represents a condition arising after the balance sheet date that affects financial estimates, but is not recognized in the financial statements.
Step-by-step explanation:
The best example of a Type II subsequent event from the options provided is c. Inability to collect from a significant customer. This is because a Type II subsequent event, also known as a nonrecognized subsequent event, refers to events that provide evidence about conditions that did not exist at the date of the balance sheet being reported on but arose subsequent to that date.
An inability to collect from a significant customer is a condition that arises after the balance sheet date and could significantly affect the estimates used in the financial statements, although it is not recognized within the financial statements themselves.
Other options are not relevant as they do not represent events that provide evidence of conditions after the balance sheet date. For example, the election of new board members or change in auditors are governance changes that do not necessarily reflect financial conditions post balance sheet date.
Acquisition of a subsidiary, while significant, typically represents a new condition and is generally a recognized subsequent event if the acquisition occurred after the balance sheet date but before the financial statements were issued or available to be issued.