Which of the Following Circumstances Would Require a Contingent Liability

question 138

Multiple Choice

Which of the following circumstances would require a contingent liability to be recorded under generally accepted accounting principles?

• A)The liability is probable and not estimable.
• B)The liability is remote.
• C)The liability is possible.
• D)The liability is probable and estimable.

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Definitions:

Life Expectancy

The average number of years an individual or group is expected to live, often used as a statistical measure of health and well-being in a population.

Input Markets

Markets where firms buy resources, services, and goods they need to produce their own products or provide services.

Substitute Good

A product or service that serves as an alternative to another, where an increase in the price of one leads to an increase in demand for the other.

Union Wages

Wages that are negotiated by labor unions on behalf of their members, often resulting in higher pay and better benefits than non-union wages.