A Contingent Liability That Has a Remote Possibility of Becoming

question 89

True/False

A contingent liability that has a remote possibility of becoming an actual loss is not included in a note to the financial statements.

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Definitions:

Corporation

A legal entity recognized by law, formed to conduct business and capable of suing or being sued.

Financial Intermediary

An entity that acts as a middleman between two parties in a financial transaction, such as banks, investment funds, and insurance companies.

Economies of Scale

Cost advantages reaped by companies when production becomes efficient, as the scale of operation and output increases.

Capital Markets

Financial markets for buying and selling equity and debt instruments, facilitating the raising of capital.