If the Likelihood of an Obligation Is Remote

question 150

Multiple Choice

If the likelihood of an obligation is remote:

• A)no action is necessary in the accounting treatment.
• B)the disclosure with explanation is put into the financial statement footnotes.
• C)the obligation with the estimated dollars is recorded on the Balance Sheet.
• D)the obligation with the estimated dollars is recorded and put into the footnotes.

Understand the criteria for evaluating the adequacy of hypotheses and explanations.

Identify the characteristics that make an explanation logically strong, complete, and informative.

Distinguish between true and adequate hypotheses and the implications for explanations.

Recognize the importance of the relationship between hypotheses and explananda in constructing explanations.

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