A Contingent Liability Is Recorded by Making the Appropriate Journal

question 40

Multiple Choice

A contingent liability is recorded by making the appropriate journal entry if the likelihood of a loss from a contingency is

• A) Remote
• B) Reasonably possible
• C) Probable
• D) Negligible

Understand the importance of management by exception in controlling operations.

Understand the principles of recording interest income and the impact on financial statements.

Grasp the concept and implications of loan collateralization and the responsibilities of borrowing and lending parties.

Master the process of recognizing and recording sales and interest income on notes receivable.

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Definitions:

Dangerous Object

An item that through its inherent characteristics, use, or misuse, can reasonably be foreseen to cause injury or harm.

Motor Vehicle

A self-propelled vehicle used for transporting passengers or goods on a road.

Peroxide

A compound containing two oxygen atoms bonded together in its molecule or as the anion O2^2-. Commonly used as a bleaching agent and antiseptic.

Break Off

To discontinue or end abruptly a relationship, negotiation, or engagement of some sort.