Which of the Following Is the Proper Treatment for a Liability

question 27

Multiple Choice

Which of the following is the proper treatment for a liability that exists,but the exact amount of which is not known?

• A)The liability should be ignored.
• B)The liability should be treated as a contingent liability.
• C)The amount of the liability should be estimated and recorded.
• D)The liability should be reported in the notes to the financial statements.

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Definitions:

Companies

Business entities formed to engage in commercial, industrial, or professional activities, often to generate profit.

Friendly Notes

Informal written messages that convey warmth, personal interest, or kindness, often used to maintain or strengthen relationships.

Goodwill Messages

Communications intended to foster positive relationships, express thanks, or offer good wishes, often in a business context.

Congratulations

An expression of joy or acknowledgment for an achievement, success, or good fortune of others.