If an Event Makes It Probable That a Company Will

question 92

Multiple Choice

If an event makes it probable that a company will experience a cash outflow but it cannot reasonably estimate the amount, the contingent liability

• A) should be recorded in the accounts.
• B) should be disclosed in the notes to the financial statements.
• C) should not be recorded or disclosed in the notes until the contingency actually happens.
• D) must be paid for the amount estimated.

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Definitions:

Feature Detectors

Nerve cells in the brain that respond to specific features of a stimulus, such as shape, angle, or movement.

Absolute Threshold

The minimum stimulus intensity required to detect a particular stimulus 50% of the time.

Adaptation Threshold

The limit to which an organism or a system can adapt to changes in conditions or stimuli.

Difference Threshold

The smallest amount of change in a stimulus that can be detected as different from the original stimulus.