A Contingent Liability That Is Probable and Can Be Reasonably

question 84

Multiple Choice

A contingent liability that is probable and can be reasonably estimated will immediately result in

• A)an increase in both liabilities and stockholders' equity.
• B)an increase in liabilities and a decrease in net income.
• C)an increase in liabilities without any need for financial statement disclosure.
• D)an increase in liabilities and a decrease in assets.

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Definitions:

Coin

A piece of metal, usually flat and circular, authorized by a government for use as money.

Parabola

A U-shaped curve, represented mathematically as the graph of a quadratic function.

Vertex

In the context of geometry and graph theory, a vertex is a point where two or more curves, edges, or lines meet. In the context of quadratic functions, it is the highest or lowest point of the parabola.

Intercepts

Points where a graph crosses the axes of a coordinate system, typically identified as x-intercepts (where the graph crosses the x-axis) and y-intercepts (where it crosses the y-axis).