Define the Term Contingent Liability and Discuss the Criteria Accountants

question 32

Essay

Define the term contingent liability and discuss the criteria accountants and auditors use to classify these accounting events.

Analyze the relationship between risk, return, and the diversification of investment portfolios.

Calculate and interpret portfolio standard deviation and beta as measures of risk.

Understand the concept of correlation and its impact on portfolio risk.

Interpret regression outputs related to stock and market returns.

---

Definitions:

High-low

A technique used in accounting and finance to estimate fixed and variable costs by analyzing the highest and lowest levels of activity.

Cost Estimation

The process of predicting the costs of producing a product or service, typically involving historical data analysis and forecasting techniques.

Cost Line

A graphical representation of the costs incurred by a company, set against a range of production or service volumes.

Relevant Range

The range of activity within which the assumptions about fixed and variable costs are valid for the purposes of cost behavior analysis and budgeting.