A Contingent Liability's Dollar Amount Does Not Get Reported on the Balance

question 57

Multiple Choice

A contingent liability's dollar amount does not get reported on the balance sheet if

• A)the probability that the event will occur is low and if the amount cannot be reasonably estimated.
• B)the probability that the event will occur is high and if the amount cannot be reasonably estimated.
• C)the probability that the event will occur is low or if the amount cannot be reasonably estimated.
• D)the probability that the event will occur is high only.
• E)the amount cannot be reasonably estimated only.

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Definitions:

Price of Tea

The cost for which tea is sold, which can vary based on factors like quality, location, and market conditions.

Negative Income Elasticity

A condition where the demand for a good decreases as the income of the consumer increases.

Inferior Good

A type of product whose demand decreases when the income of consumers increases and vice versa.

Demand Coefficient

A measure that indicates the sensitivity or responsiveness of the quantity demanded of a good or service to changes in its price.