Under ASPE, a Contingent Liability Is Recorded in the Accounting

question 74

Multiple Choice

Under ASPE, a contingent liability is recorded in the accounting records

• A) if it is likely that a future event will confirm that a liability has been incurred and the amount of the related loss can be estimated.
• B) if the contingency has not already been disclosed in the notes to the financial statements.
• C) if the amount can be estimated, but the possibility of occurrence is remote.
• D) under no circumstances.

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Definitions:

Service Sector

The segment of the economy that provides intangible goods and services, including healthcare, education, entertainment, and financial services, among others.

Rapid Growth

A phase in which an entity (such as an economy, company, or biological organism) experiences a significantly faster than usual increase in size or numbers.

Wealthy Owning Class

A segment of society composed of individuals and families that possess a significant portion of the wealth, often exercising considerable economic and political influence.

Poor Working Class

Individuals and families who perform manual labor or low-skill jobs and live with minimal financial security.