Which Statement About Contingent Assets Is Correct

question 57

Multiple Choice

Which statement about contingent assets is correct?

• A)It involves only potential economic outflows of resources.
• B)It is a possible asset that depends upon the outcome of a future event.
• C)It involves uncertainty about either the timing or amount of payment.
• D)It is a condition that depends upon the outcome of a forecasted event.

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Definitions:

Recourse

refers to the right to demand a legal or financial remedy when a contractual obligation is not honored by the other party.

Forged Instrument

indicates a document that has been illegally altered or created to look genuine for the purpose of deceit or fraud.

Checking Account

A bank account from which funds can be withdrawn using checks, debit cards, or electronic transfers, offering easy access to money for daily transactions.

Negligent

Failing to take proper care in doing something, leading to damage or injury to another.