Which Statement About Contingencies Is Correct

question 38

Multiple Choice

Which statement about contingencies is correct?

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

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Definitions:

Total Cost Transferred

The cumulative cost relocated from one department to another or from production to finished goods inventory.

Processing Department

A specific location or unit within a manufacturing facility where a distinct process or series of processes occur for the production of goods.

Equivalent Unit

A measure used in cost accounting to express the amount of work done on partially finished goods as an equivalent number of fully finished units.

Processing Department

A division within a manufacturing facility where a specific type of production activity or process is carried out.