The Most Common Type of Liability Is

question 155

Multiple Choice

The most common type of liability is:

• A) One that comes into existence due to a loss contingency.
• B) One that must be estimated.
• C) One that comes into existence due to a gain contingency.
• D) One to be paid in cash and for which the amount and timing are known.

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Definitions:

Shareholder

An individual or entity that owns shares in a company, thus holding a portion of the company's equity and potentially influencing its decisions.

Corporate Records

Documents and records that a corporation is legally required to maintain, usually including incorporation papers, bylaws, meeting minutes, and financial statements.

Compensation

Payment or reward given for services rendered, loss incurred, or for the performance of duties or responsibilities.

Board of Directors

A group of individuals elected by shareholders to make major decisions and oversee the management of a corporation.