Which of the Following Statements Is Correct

question 9

Multiple Choice

Which of the following statements is correct?

• A) For companies that are self-insured, a provision must be established for events taking place prior to the reporting period if known.
• B) There is no guidance for self-insurance under IFRS.
• C) Contingent assets are only recorded when it is virtually certain that the benefits relating to the contingent assets will be received.
• D) Contingent assets are only recorded when it is reasonably certain that the benefits relating to the contingent assets will be received.

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Definitions:

Variable Expenses

Costs that vary in proportion to changes in the level of activity or volume of production.

Contribution Format

A type of income statement format that separates fixed and variable costs, helping in determining the contribution margin of sold goods or services toward fixed costs and profits.

Management Performance Appraisals

The systematic evaluation of the performance of managers and the effectiveness of their leadership in achieving business objectives.

Budgeting

The process of creating a plan to spend your money, outlining future financial goals and how resources will be allocated to achieve them.