Which of the Following Contingencies Should Be Accrued in the Accounts

question 23

Multiple Choice

Which of the following contingencies should be accrued in the accounts and reported in the financial statements?

• A) The company is forcefully contesting a personal injury lawsuit and a loss is possible and reasonable estimable.
• B) An accommodation endorsement involving a remote loss
• C) It is probable that a company will receive $50,000 in settlement of a lawsuit.
• D) The estimated expenses of a one-year product warranty.

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Definitions:

Standard Error

Indicates the standard deviation of the sampling distribution of a statistic, most commonly the mean.

Standard Deviation

A quantification of how much a group of values diverges or spreads out.

Confidence Interval

An expanse of measurable outcomes, derived from sample analysis, foreseen to incorporate the hidden value of a population attribute.

Standard Deviation

A measure of the amount of variation or dispersion of a set of values from their mean.