When the Likelihood of an Actual Loss Is Probable,and the Amount

question 153

True/False

When the likelihood of an actual loss is probable,and the amount can be estimated,it should be recorded as an expense and as a liability.

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Definitions:

Activity Level

A measure of the volume or quantity of production or operations within a specific period.

Direct Proportion

A relationship between two quantities where they increase or decrease at the same rate.

Relevant Range

The range of activity within which the assumptions about variable and fixed cost behaviors hold true.

Total Fixed Costs

Financial obligations that do not fluctuate with the amount of goods made or sold, for instance, rent, salaries, and insurance coverage.