Which Statement Is Correct About Provisions,contingent Assets and Contingent Liabilities

question 82

Multiple Choice

Which statement is correct about provisions,contingent assets and contingent liabilities?

• A)Provisions are recorded in the financial statements whereas contingent assets are not recorded.
• B)Provisions are recorded in the financial statements whereas contingent liabilities are not recorded.
• C)Probable contingent liabilities are recorded at management's best estimates.
• D)Probable contingent assets are recorded at management's best estimates.

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Definitions:

Finite Population Correction

A statistical adjustment made when the sample size is a significant fraction of the total population, reducing variance estimates to prevent overestimation.

Standard Error

Standard error is a statistical term that measures the accuracy with which a sample distribution represents a population by using standard deviation.

Estimate

An approximation or educated guess based on available data or evidence.

Mean

The average of a set of values, calculated by dividing the sum of these values by their count.