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:

Note Receivable

A financial asset representing a written promise to receive a specific amount of money, plus interest if applicable, by a certain date.

Dishonored

A term used when an instrument such as a check is not accepted or paid upon presentation.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered or used but not yet paid for.

Short-Term Notes Receivables

Short-duration financial assets representing amounts owed to a company that must be paid within a year.