When the Amount of a Contingent Liability Can Be Reasonably

question 114

Multiple Choice

When the amount of a contingent liability can be reasonably estimated and its likelihood is possible but not probable,the company should:

• A)include a description in the notes to the financial statements.
• B)record the amount of the liability times the probability of its occurrence.
• C)accrue the amount of the liability as a long-term liability.
• D)exclude any information about the contingent liability from its financial statements and notes.

---

Definitions:

World Health Organization

A specialized agency of the United Nations responsible for international public health, working to address health issues and promote healthy living globally.

Universal Perspective

A viewpoint that tries to consider things in a comprehensive, global manner, transcending individual or local interpretations.

Explanatory Model

A conceptual framework or theory that helps to understand, explain, or predict phenomena or behavior in a comprehensive manner.

Sangoma

A traditional healer or shaman in South African cultures, known for their ability to communicate with ancestors, use herbal medicine, and perform rituals to heal physical or spiritual ailments.