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:

Irrational

Thinking or behavior that is not based on sound reasoning, logic, or factual evidence.

Cultural Difference

Variations in practices, beliefs, and values among people from different cultural backgrounds.

National Character

The idea that people in different cultures have different personalities.

Conscientiousness

A personality trait characterized by diligence, carefulness, thoroughness, and a desire to do a task well.