A Company Has a Contingent Loss That Can Be Estimated

question 72

Multiple Choice

A company has a contingent loss that can be estimated and has a probable chance of occurrence. What reporting does the FASB require regarding this contingency?

• A) It should be accrued and reported on the financial statements and reported in the notes to the financial statements.
• B) It should be reported in the notes to the financial statements.
• C) It should be ignored until the actual loss materializes.
• D) It should be accrued and reported on the financial statements.

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Definitions:

Explicit Memories

Memories of facts and experiences that an individual can consciously recall and describe.

Implicit Memories

Implicit memories are memories that influence our thoughts and behaviors without our conscious awareness, including skills and tasks learned through repetition.

Explicit Memory

The conscious recollection of information, such as facts and events, which can be verbally communicated.

Knit

The craft of creating fabric or textile by interlocking loops of yarn using needles.