Against Which of the Following Possibilities Should a High Probability

question 62

Multiple Choice

Against which of the following possibilities should a high probability that a particular loss-causing event will occur be weighed during the risk evaluation process?

• A) that the event will definitely occur and the loss is unavoidable
• B) whether the likely occurrence may be offset by a low level of associated loss
• C) whether a low probability will be offset by a high level of associated loss
• D) that the event will likely never occur and should be ignored

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Definitions:

Revenue Recognition

Revenue recognition is an accounting principle determining when revenue is earned and can be recorded in the financial statements.

Transaction Price

The price at which a particular transaction is made, affecting the exchange of goods or services between two parties.

Non-current Assets

Assets not expected to be converted into cash, sold, or consumed within one year or the operating cycle, such as property, plant, and equipment.

Long-term Prepayment

Payments made in advance for goods or services to be received or used in future periods, extending beyond the current accounting year.