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:

Deadweight Loss

The loss of economic efficiency when the equilibrium outcome is not achievable or not achieved in a market.

Perfectly Inelastic

A market condition where the quantity demanded or supplied does not change in response to price changes.

Deadweight Loss

An economic inefficiency that occurs when the total welfare in a market is not maximized, resulting from distortions such as taxes, subsidies, or monopolies.

Excise Tax

A tax imposed on specific goods, services, or activities, often included in the price of products like tobacco, alcohol, and fuel, designed to discourage their use or generate revenue.