Which Statement About Contingencies Is Correct

question 13

Multiple Choice

Which statement about contingencies is correct?

• A)If the future outcome is possible and reliably measurable,a provision is recorded.
• B)If the future outcome is possible,but reliably measurable,no action is required.
• C)If the future outcome is possible,but not reliably measurable,no action is required.
• D)If the future outcome is possible,but reliably measurable,disclosure is required.

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Definitions:

Total Current Assets

The sum of all assets that are expected to be converted into cash, sold, or consumed within one year or the normal operating cycle, whichever is longer.

Current Liabilities

A company's debts or obligations that are due to be paid to creditors within one year.

Competitive Advantage

A condition or circumstance that puts a company in a favorable or superior business position relative to its competitors.

Low-Cost Leadership

A strategy where a business aims to become the least costly producer in its industry while maintaining sufficient levels of quality.