If a Loss Contingency Is Reasonably Possible or the Amount

question 89

Multiple Choice

If a loss contingency is reasonably possible or the amount cannot be reasonably estimated, _______.

• A)disclosure should occur in both the financial statements and the notes to the financial statements
• B)disclosure should occur in the financial statements only
• C)only a disclosure in the notes is required
• D)then no disclosure is required

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Definitions:

Labor Costs

The total sum of all wages paid to employees, as well as the costs of employee benefits and payroll taxes incurred by an employer.

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment.

Portfolio

A collection of financial investments like stocks, bonds, commodities, cash, and cash equivalents, including closed-end funds and exchange traded funds (ETFs).

Securities

Financial instruments that represent an ownership position in a company (stocks), a creditor relationship with a governmental body or a corporation (bonds), or rights to ownership as represented by an option.