If a Potential Loss on a Contingent Liability Is Remote

question 88

Multiple Choice

If a potential loss on a contingent liability is remote, the liability usually is

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

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Definitions:

Hypothetical Incident

An imagined or theoretical situation used for the purpose of analysis, discussion, or problem-solving.

Situational Interview

A job interview method where candidates are asked to describe how they would handle specific job-related situations, testing their problem-solving and decision-making abilities.

Poor Prediction Rate

The occurrence of low accuracy in forecasting future events, outcomes, or behaviors, often due to inadequate information or model flaws.

Ability Test

An assessment used to measure specific skills or competencies, often related to intellectual or physical capabilities.