A Gain Contingency Can Be Accrued When

question 128

Multiple Choice

A gain contingency can be accrued when:

• A) it is certain that a dispute will be settled in the company's favour.
• B) it is probable that a future asset will be accrued by the company.
• C) the amount of the gain can be reasonably estimated, and it is likely that a company will have a future claim to an asset.
• D) Gain contingencies are not accrued.

---

Definitions:

Profit-Maximizing

A strategy aiming to achieve the highest possible profit from business operations.

ATC

Short for Average Total Cost, ATC represents the total cost per unit of output, calculated by dividing the total cost by the quantity produced.

Monopolistic Competition

A business environment where a multitude of firms provide closely related but not identical products, granting them some market control.

Marginal Decision Rule

A principle that suggests decisions should be made by considering the additional benefits and costs of one more unit of change.