Which of the Following Contingencies Should Be Accrued in the Accounts

question 48

Multiple Choice

Which of the following contingencies should be accrued in the accounts and reported in the financial statements?

• A)The estimated expenses of a one-year product warranty.
• B)An accommodation endorsement involving a remote loss.
• C)The company is forcefully contesting a personal injury suit and a loss is possible and reasonably estimable.
• D)It is probable that the company will receive $50,000 in settlement of a lawsuit.

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Definitions:

Genetic Instructions

The information encoded in an organism's DNA that guides its development, functioning, and reproduction.

Proliferative Phase

The buildup of the endometrium in response to increased estrogen during the menstrual cycle.

Corpus Luteum

The tissue formed from a ruptured ovarian follicle that produces important hormones after the oocyte emerges.

Glycogen

A form of glucose storage in the body, primarily found in the liver and muscles.