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:

Sigmund Freud

An innovator in neurology from Austria, he introduced psychoanalysis as a method to heal psychopathologies through verbal exchanges between a patient and a psychoanalyst.

Functions

Distinctive roles or activities that an entity or process performs or serves in a system or organization.

William James

An American psychologist and philosopher who is considered one of the founding figures of modern psychology.

Biological Origins

Biological origins pertain to the initial and evolutionary beginnings of life and living organisms from a biological perspective.