Which Statement Is Correct About Provisions,contingent Assets and Contingent Liabilities

question 82

Multiple Choice

Which statement is correct about provisions,contingent assets and contingent liabilities?

• A)Provisions are recorded in the financial statements whereas contingent assets are not recorded.
• B)Provisions are recorded in the financial statements whereas contingent liabilities are not recorded.
• C)Probable contingent liabilities are recorded at management's best estimates.
• D)Probable contingent assets are recorded at management's best estimates.

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Definitions:

Direct Labor-hours

The total time workers spend working directly on manufacturing goods, often used as a basis for allocating manufacturing overhead.

Variable Overhead Rate Variance

The difference between the actual variable overhead incurred and the expected (standard) variable overhead based on the actual production level.

Indirect Labor

Labor costs associated with tasks that do not directly contribute to the production of a specific product, such as maintenance or supervision.

Variable Overhead Rate Variance

The difference between the actual variable overhead costs incurred and the expected costs based on standard rates and actual production levels.