A Contingent Liability That Has a Remote Chance of Occurrence

question 53

Multiple Choice

A contingent liability that has a remote chance of occurrence and an uncertain amount 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:

Seminal Vesicles

Glandular structures located near the prostate that produce a significant portion of the fluid that becomes part of semen, rich in proteins and enzymes that support sperm viability and motility.

Membranous Urethra

Portion of the male urethra, approximately 1 cm in length, extending from the prostate gland to the beginning of the penile urethra.

Columnar Epithelium

A type of epithelial tissue consisting of single or multiple layers of tall, elongated cells, often found lining the gut and respiratory tract.

Urethra

The tube that conducts urine from the bladder to the outside of the body in both males and females, and also carries semen in males.