A Contingent Liability That Is Likely and Can Be Reasonably

question 25

Multiple Choice

A contingent liability that is likely and can be reasonably estimated should be:

• A)disclosed in a note to the financial statements.
• B)accrued with a journal entry.
• C)either disclosed in a note or accrued with a journal entry.
• D)ignored until the liability materializes.

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Definitions:

Concept

An abstract idea or a mental symbol that represents a specific thing, category, or idea.

Genus

A class or category of things that share common characteristics, often used in the classification of organisms or in defining concepts.

Language

A system of communication used by a particular country or community, composed of spoken or written symbols.

Species

A community of similar life forms that are capable of reproducing or swapping genetic information.