Which Statement About Contingencies Is Correct

question 4

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 probable and reliably measurable,a provision is recorded.
• C)If the future outcome is probable,a provision is recorded even if it is not reliably measurable.
• D)If the future outcome is possible,a provision is recorded even if it is not reliably measurable.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, and insurance premiums, over a specified period.

Variable Costs

Costs that vary in direct proportion to changes in the level of production or sales volume, such as raw materials and labor.

Total Revenue

The total income generated from the sale of goods or services by a company before any expenses are subtracted.

Marital Rape

The act of sexually assaulting a spouse without their consent, recognized as a crime in many jurisdictions.