A Contingency Need Not Be Recorded nor Disclosed When

question 108

Multiple Choice

A contingency need not be recorded nor disclosed when

• A) it is probable the contingency will happen and the amount can be reasonably estimated.
• B) it is probable the contingency will happen but the amount cannot be reasonably estimated.
• C) it is reasonably possible the contingency will happen and the amount can be reasonably estimated.
• D) the possibility of the contingency happening is remote.

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Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or resource, usually intended to protect consumers from prices deemed excessively high.

External Benefits

Benefits derived from a product or service that affect parties who did not choose to incur that benefit.

Efficient Level

The optimal point of operation where resources are used in such a way that maximizes productivity and minimizes waste.

Negative Externality

A cost that is suffered by a third party due to an economic transaction, where the cost is not reflected in the transaction's final price.