Which of the Following Statements Regarding Contingencies Is True

question 81

Multiple Choice

Which of the following statements regarding contingencies is true?

• A) Contingencies that are not estimable should not be disclosed even if probable.
• B) Contingent assets, if probable and estimable, are treated in much the same way as contingent liabilities.
• C) Contingencies that are probable and estimable must be recorded before the outcome of future events.
• D) The accounting principle that determines whether a contingent asset is recorded is that of materiality.

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Definitions:

Master Honoré

A noted Parisian miniature painter from the late 13th and early 14th centuries, known for his work in illuminated manuscripts.

Sexpartite Rib Vaults

A complex vaulting system in Gothic architecture, dividing the ceiling into six vaulted compartments with the use of ribs for structural and decorative purposes.

Laon Cathedral

A prime example of Gothic architecture located in Laon, France, known for its early use of ribbed vaults and flying buttresses.

Romanesque Feature

Architectural characteristics typical of the Romanesque style, including rounded arches, solid construction, and extensive use of stone.