Under FASB Rules, a Material Loss Contingency Must Be Accrued

question 35

True/False

Under FASB rules, a material loss contingency must be accrued if it is both "probable" and "reasonably estimable."

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Definitions:

Net Income

The net income a company earns following the subtraction of all expenses and taxes from its total revenue.

Accounting Methods

Accounting methods are the specific principles and procedures implemented by a business or organization to prepare its financial statements.

Rigid Accounting Rules

Accounting practices that are strictly defined with little to no room for interpretation or flexibility in their application.

Infrequent Event

An event or transaction that occurs rarely and is not expected to happen regularly in the normal course of business.