Potential Events That Could Create Negative Financial Results for a Company,which

question 79

Multiple Choice

Potential events that could create negative financial results for a company,which are required to be recorded when the event is both probable and reasonably estimated in terms of its monetary effects,are referred to as:

• A)deferred charges
• B)cumulative effects
• C)contingent liabilities
• D)prior period adjustments

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Definitions:

Other Receivable

Financial claims against other parties excluding customers, typically representing short-term non-trade receivables such as refunds, deposits, or advances.

Notes Receivable

Financial assets representing the right to receive payments from a debtor pursuant to a written promise or agreement.

Direct Write-off Method

An accounting method where uncollectible accounts receivable are directly written off against income at the time they are deemed unrecoverable.

Balance Sheet

A list of the assets, liabilities, and owner’s equity as of a specific date, usually at the close of the last day of a month or a year.