A Threat of Expropriation of Assets That Is Reasonably Possible

question 16

Multiple Choice

A threat of expropriation of assets that is reasonably possible, and for which the amount of loss can be reasonably estimated, is an example of a (an)

• A) Loss contingency that should be disclosed, but not accrued
• B) Loss contingency that should be accrued and disclosed
• C) Appropriation of retained earnings against which losses should be charged
• D) General business risk which should not be accrued and need not be disclosed

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Definitions:

Private Parties

Refers to individuals or entities that are not part of the government or public sector, engaging in activities or agreements among themselves.

Government Initiated

Actions or policies started by a government agency or institution to address specific issues or regulate behavior.

Duty of Care

A legal obligation to adhere to a standard of reasonable care while performing any acts that could foreseeably harm others.

Enron

A former American energy company that collapsed due to widespread corporate fraud and corruption.