When a Company Can Estimate a Range for the Loss

question 54

True/False

When a company can estimate a range for the loss, but cannot identify a single most-likely outcome within that range, IFRS requires that it accrue the midpoint of the range while U.S. GAAP requires that it accrue the minimum value of the range.

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Definitions:

Wages Expense

Wages expense refers to the total cost incurred by a business for paying salaries or wages to its employees over a specific period.

Wages Payable

A liability account that records the amount of wages earned by employees but not yet paid by the company.

Unearned Rent

Income received by a landlord for rent that has been paid in advance, but which covers a period that has not yet occurred, and is recorded as a liability.

Net Income

The total profit of a company after all expenses are deducted from revenues, also known as the bottom line.