A Contingent Liability

question 54

Multiple Choice

A contingent liability

• A)is definite in existence, but its amount and due date are not yet known.
• B)has the same requirements as a contingent gain.
• C)must be accrued even when it is not reasonably estimable.
• D)is disclosed only in the financial statement notes if highly probable and the amount can be estimated.

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Definitions:

Financial Transaction

Any exchange or transfer of money or monetary value between parties.

Purchase Decision

The process by which a consumer decides to buy a product or service, influenced by factors such as need, desire, price, and brand reputation.

Flat-Screen TV

A modern television featuring a slim profile due to the use of LCD, LED, or plasma technology, offering improved image quality over older CRT models.

Afford

The ability of an individual or organization to manage financial expenditure on goods, services, or investments without undue hardship.