When Selecting Within a Range of Outcome Estimates for Probable

question 58

Multiple Choice

When selecting within a range of outcome estimates for probable contingencies, the requirements of IFRS and GAAP, respectively, are to accrue what amount in the range? $\begin{array}{lll}&\text { IFRS }&\text { GAAP }\\\text { I. } & \text { minimum } & \text { minimum } \\\text { II. } & \text { midpoint } & \text { minimum } \\\text { III. } & \text { minimum } & \text { midpoint } \\\text { IV. } & \text { midpoint } & \text { midpoint }\end{array}$

• A)I
• B)II
• C)III
• D)IV

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Definitions:

Journalize

The act of recording business transactions in the journal of an accounting system, marking the first step in the accounting cycle.

Normal Balance

The side (debit or credit) of an account that is typically increased; varies depending on the account type.

Debit

An accounting entry that increases an asset or expense account or decreases a liability or equity account.

Credit

In finance, it refers to the borrowing capacity of an individual or company, or the entry on the right side of a financial account, indicating an increase in liability or decrease in asset.