If the Amount of a Probable Loss on a Contingent

question 52

Multiple Choice

If the amount of a probable loss on a contingent liability cannot be estimated but the event is likely,the liability should be

• A)accrued and indicated in the body of the financial statements.
• B)disclosed in footnotes but not accrued.
• C)neither accrued nor disclosed in footnotes.
• D)disclosed in the auditor's report but not disclosed on the financial statements.

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Definitions:

Mayonnaise

A thick, creamy sauce or dressing made from oil, egg yolks, lemon juice or vinegar, and seasonings.

Spring Frost

An unexpected freeze during springtime that can damage or kill new plant growth and negatively impact agricultural production.

Artichoke Crop

The agricultural production focused on growing artichokes, a type of thistle cultivated as food.

Birthrate

The number of live births per thousand of the population per year.