If Management Determines the Loss Contingency Is Probable and an Amount

question 106

Multiple Choice

If management determines the loss contingency is probable and an amount can be reasonably estimated, then the company _______.

• A)must record a liability and a related expense or loss, and disclose the relevant details of the event in the notes to the financial statements
• B)must record an asset and a related expense or loss, and disclose the relevant details of the event in the notes to the financial statements
• C)must record a liability and a related depreciation expense or loss, and disclose the relevant details of the event in the notes to the financial statements
• D)should include a note in the notes to the financial statements but need not record an entry in accounting journals

---

Definitions:

Gender Identity

A person's internal sense of their own gender, whether male, female, both, neither, or anywhere along the gender spectrum.

Personalities

The combination of characteristics or qualities that form an individual's distinctive character or temperament.

Good and Bad Qualities

Characteristics or attributes of a person, object, or action that are deemed positive or negative based on moral, social, or personal standards.

Positively

In a manner that is optimistic, constructive, or beneficial, often associated with affirmative actions and outcomes.