The GAAP Rule for Recognizing Loss Contingencies Is

question 84

Multiple Choice

The GAAP rule for recognizing loss contingencies is:

• A) Loss contingencies are not recognized.
• B) Loss contingencies must be recognized when the loss is at least "reasonably possible," and can be estimated.
• C) Loss contingencies must be recognized as long as their likelihood is at least "slight," and the amount can be estimated.
• D) Loss contingencies must be recognized as long as their likelihood is "probable," and the amount can be estimated.

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Definitions:

Proportional

Relating to or denoting a relationship where quantities or sizes are in direct relation to each other.

Tax Tables

A set of charts provided by the IRS that help taxpayers determine the amount of federal income tax they owe based on their income level and filing status.

Tax Rate Schedules

Detailed charts provided by the IRS that determine the amount of tax an individual or entity owes based on their income level.

Progressive Tax Structure

A taxation system where tax rates increase as the taxable amount increases, resulting in higher income earners paying a larger percentage of their income in taxes.