Which of the Following Contingencies Should Be Accrued in the Accounts

question 19

Multiple Choice

Which of the following contingencies should be accrued in the accounts and reported in the financial statements?

• A) The estimated expenses of a one-year product warranty.
• B) The company is forcefully contesting a personal injury suit and a loss is possible and reasonably estimable.
• C) An accommodation endorsement involving a remote loss.
• D) It is probable that the company will receive $50,000 in settlement of a lawsuit.

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Definitions:

Passive Management

A leadership style characterized by minimal intervention, letting processes and issues unfold or resolve naturally without active direction.

Contingent Reward

A leadership strategy that offers rewards or incentives based on the achievement of specific goals or performance criteria.

Political Conflict

Disagreements or disputes that arise from differences in views, interests, or goals related to governance, policies, or political ideologies.

Ideological Conflict

Disagreements or disputes arising from deeply held beliefs or values between individuals or groups.