A Certain Contingent Liability Was Evaluated at Year-End, and Considered

question 152

True/False

A certain contingent liability was evaluated at year-end, and considered to have a remote possibility of becoming an actual liability. If the accountant decided not to report it on the balance sheet or in the notes to the financial statements, this could be considered a violation of generally accepted accounting principles.

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Definitions:

Diagnosed

The process of identifying a disease or condition by its signs, symptoms, and possibly through diagnostic tests.

Mentally Ill

Refers to individuals suffering from disorders that affect the mind, leading to impairments in perception, thinking, or emotional state.

Labels

Terms or phrases applied to people or things to categorize them, often influencing perceptions and behavior.

Self-fulfilling

A prophecy or expectation that causes itself to become true due to positive feedback between belief and behavior.