A Contingent Liability Is Recorded in the Accounting Records

question 125

Multiple Choice

A contingent liability is recorded in the accounting records

• A)if a reasonable estimate of the expected loss can be determined and if it is probable.
• B)if the contingency has not already been disclosed in the notes to the financial statements.
• C)if the amount can be estimated, but the possibility of occurrence is remote.
• D)under no circumstances.

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Definitions:

Sinusoids

Specialized, capillary-like vessels that are larger and more permeable, found in certain organs like the liver, spleen, and bone marrow, facilitating blood flow and exchange of nutrients.

Liver

A large vital organ in vertebrates responsible for detoxification, protein synthesis, and biochemical production necessary for digestion and metabolism.

Goblet Cells

Specialized epithelial cells found in the respiratory and intestinal tracts, secreting mucus to lubricate and protect the mucous membranes.

Granular Cells

Cells containing granules that release substances involved in various bodily functions, such as inflammation or blood pressure regulation.