Which Statement Is Correct About Provisions,contingent Assets and Contingent Liabilities

question 67

Multiple Choice

Which statement is correct about provisions,contingent assets and contingent liabilities?

• A)The same probability threshold is used to record contingent liabilities and provisions.
• B)The same probability threshold is used to record contingent assets and contingent liabilities.
• C)Possible contingent liabilities are recorded.
• D)Virtually certain contingent assets are recorded.

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Definitions:

Involuntary Bankruptcy

A legal process initiated by creditors against a debtor who is unable to pay its debts, forcing the debtor into bankruptcy proceedings.

Chapter 7

A bankruptcy provision that involves the liquidation of a debtor's non-exempt assets to pay off creditors.

Alimony Payments

are financial support payments made by one ex-spouse to the other after divorce, as mandated by the court.

Consumer Debt

Financial obligations incurred by individuals primarily for personal, family, or household purposes, including credits cards, mortgages, and personal loans.