If a Contingent Liability Is Reasonably Estimable and It Is

question 61

Multiple Choice

If a contingent liability is reasonably estimable and it is reasonably possible that the contingency will occur the contingent liability

• A) should be recorded in the accounts.
• B) should be disclosed in the notes accompanying 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:

Subway Tracks

The rails upon which subway trains run, typically located underground in urban areas to provide mass transportation.

Social-Responsibility Norm

is a societal rule that people should help those who need assistance, based on the expectation that helping others is the right thing to do.

Altruism

The selfless concern for the well-being of others, often leading to acts of kindness without the expectation of reward.

Superordinate Goals

Objectives that require two or more groups to work together to achieve, thus reducing conflict by uniting the groups with common interests.