A Gain Contingency That Is Reasonably Possible and for Which

question 62

Multiple Choice

A gain contingency that is reasonably possible and for which the amount can be reasonably estimated should be

• A)accrued
• B)disclosed but not accrued
• C)neither accrued nor disclosed
• D)classified as an appropriation of retained earnings

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Definitions:

Competitive Industries

Industries characterized by many firms competing for market share, leading to innovation and efficient resource allocation.

Production Costs

Expenses incurred during the process of creating a good or service, including labor, raw materials, and overhead costs.

Decreasing-Cost Industry

An industry in which expansion through the entry of firms lowers the prices that firms in the industry must pay for resources and therefore decreases their production costs.

Long-Run Supply Curve

As it applies to macroeconomics, a supply curve for which price, but not real output, changes when the demand curves shifts; a vertical supply curve that implies fully flexible prices.