The Disclosure of a Contingent Liability Only in the Footnotes

question 120

Multiple Choice

The disclosure of a contingent liability only in the footnotes designates that the possibility of an actual obligation occurring is:

• A)remote.
• B)possible.
• C)probable.
• D)certain.

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Definitions:

Rate of Return

The profit or deficit incurred on an investment during a designated time, shown as a fraction of the initial investment amount.

Net Income

The profit of a company after all expenses and taxes have been deducted from revenue.

Accounting Break-even

The point at which total revenues exactly equal total explicit costs, leading to neither a profit nor a loss.