If a Potential Loss on a Contingent Liability Is Likely

question 28

Multiple Choice

If a potential loss on a contingent liability is likely and the amount of the loss can be reasonably estimated,the liability should be

• A)accrued and indicated in the body of the financial statements.
• B)disclosed in footnotes but not accrued.
• C)neither accrued nor disclosed in footnotes.
• D)disclosed in the auditor's report but not disclosed on the financial statements.

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Definitions:

SAT Scores

Standardized test scores used for college admissions in the United States, assessing mathematical, reading, and writing skills.

Independent Measures

An experimental design in which different participants are used in each condition of the experiment.

Head Start Programs

A program in the United States that provides comprehensive education, health, nutrition, and parent involvement services to low-income children and their families.

Short-Term Benefits

Advantages or gains that are immediate or occur within a brief period following an action or decision.