A Loss Contingency Can Be Accrued When

question 102

Multiple Choice

A loss contingency can be accrued when

• A) it is certain that funds are available to settle the disputed amount.
• B) an asset may have been impaired.
• C) the amount of the loss can be reasonably estimated and it is probable that an asset has been impaired or a liability has been incurred.
• D) it is probable that an asset has been impaired or a liability incurred even though the amount of the loss cannot be reasonably estimated.

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Definitions:

Short Run

In economics, a timeframe during which the production process has limitations due to fixed resources, leading to constraints on firm adjustments and outputs.

Long Run

The long run is a period in economics during which all factors of production and outputs are variable and can be adjusted, contrary to the fixed factors present in the short run.

Marginal Cost Curve

A visual display illustrating the variation in the expense of manufacturing an extra item of a product as the quantity produced alters.

Peak Efficiency

The state of operation where a system or process achieves its maximum productivity with minimal waste and effort.