Contingent Liabilities Will or Will Not Become Actual Liabilities Depending

question 61

Multiple Choice

Contingent liabilities will or will not become actual liabilities depending on

• A) whether they are probable and estimable.
• B) the degree of uncertainty.
• C) the present condition suggesting a liability.
• D) the outcome of a future event.

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Definitions:

Weighted-Average Method

An inventory valuation method using the weighted average of all items in inventory to determine the cost of goods sold and ending inventory value.

Cost System

A methodical process for recording, measuring, and analyzing costs associated with a company's operations, aiding in financial planning and control.

Processing Department

A division within a manufacturing operation where a specific operational task is performed, such as mixing, cooking, or packaging.

Process Costing System

An accounting method used to assign costs to units of production in continuous processes, where similar items are produced.