A Contingent Loss Should Be Reported in a Disclosure Note

question 71

Multiple Choice

A contingent loss should be reported in a disclosure note to the financial statements rather than being accrued if:

• A) The likelihood of a loss is remote.
• B) The incurrence of a loss is reasonably possible.
• C) The incurrence of a loss is more likely than not.
• D) The likelihood of a loss is probable.

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Definitions:

Cell Phones

Portable electronic devices used for communication, including voice calls, text messaging, and Internet access.

Restaurant

A restaurant is an establishment where meals are prepared and served to customers in exchange for money, offering a variety of cuisines and dining experiences.

Knowledge Structures

Mental frameworks or organized patterns of thought that individuals use to process, store, and retrieve information.

Scripts

Predefined sequences or schemas to perform tasks or roles, often applied in behavioral psychology and programming.