A Disclosure of a Contingent Liability in the Footnotes Is

question 74

Multiple Choice

A disclosure of a contingent liability in the footnotes is made rather than adjusting the financial statement accounts when

• A) the outcome of the event is judged to be reasonably possible and the loss can be reasonably estimated.
• B) the loss can be reasonably estimated, but the outcome is unknown.
• C) the outcome of the event is judged to be reasonably possible but the loss cannot be reasonably estimated.
• D) the outcome is unknown and the loss is reasonably estimable but the entity does not want to book the loss.

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Definitions:

Sociometry

A methodological approach used to measure relationships, attraction, and social dynamics within groups.

Hierarchical Groups

Groups organized in a way that positions individuals or subgroups in levels of varying status or authority.

Communication

The exchange of information or ideas through speaking, writing, or other mediums between individuals or groups.

Status Generalization

The process by which characteristics of individuals that are irrelevant to a situation influence others' perception of their status or authority within that context.