Which Statement Is Not Correct About Commitments

question 50

Multiple Choice

Which statement is not correct about commitments?

• A)A commitment to buy equipment must be disclosed if the contract is partially executed.
• B)A commitment to buy equipment must be disclosed even if the contract is unexecuted.
• C)Onerous contracts must be disclosed if they can be reliably measured.
• D)Onerous contract must be recognized in the accounting records.

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Definitions:

Ending Balance

The final amount in an account at the end of a reporting period after all debits and credits have been accounted for.

Minimum Legal Capital

The least amount of capital that must be raised through the issue of shares for a corporation to be legally established.

Par Value

The nominal or face value of a bond, share of stock, or coupon as stated by the issuer.

Premium Capital

Capital that is obtained or raised at a value above its nominal or face value, often reflecting the additional amount paid by investors over the par value of securities or shares.