If an Event Makes It Probable That a Company Will

question 92

Multiple Choice

If an event makes it probable that a company will experience a cash outflow but it cannot reasonably estimate the amount, the contingent liability

• A) should be recorded in the accounts.
• B) should be disclosed in the notes to the financial statements.
• C) should not be recorded or disclosed in the notes until the contingency actually happens.
• D) must be paid for the amount estimated.

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Definitions:

Anxiety Disorder

A mental health disorder characterized by excessive fear, worry, or unease that is difficult to control and affects daily functioning.

Reduce Worry

Strategies or approaches aimed at diminishing feelings of concern or anxiety about potential problems or threats.

Panic Disorder

A psychiatric disorder characterized by recurrent unexpected panic attacks and fear of future attacks, leading to significant distress or impairment in functioning.

Unpredictable Episodes

Sudden and unforeseen occurrences or events, often related to health conditions, that can significantly impact an individual's well-being or the state of a situation.