Onopea Inc

question 93

Multiple Choice

Onopea Inc.considered two contingencies at the end of 2016: ** a probable loss in the range of $300,000 to $500,000
** a reasonably possible loss of $150,000
Under U.S.GAAP,what is the balance for contingent liabilities at the end of 2016?

• A)$300,000
• B)$400,000
• C)$450,000
• D)$550,000

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Definitions:

Inventories

Items of merchandise, raw materials, work-in-progress, and finished goods that a company holds for the purpose of sale in the ordinary course of business.

Raw Materials

The basic materials from which products are manufactured or made, typically unprocessed or minimally processed states.

Work In Process

Goods partially completed in manufacturing but not yet ready for sale, representing a component of a company’s inventory.

Finished Goods

Items are completed and ready for sale following a production process.