Which of the Following Is the Proper Treatment for a Liability

question 23

Multiple Choice

Which of the following is the proper treatment for a liability that exists, but the exact amount of which is not known? Assume the probability of loss is probable and the amount of the loss can be estimated.

• A)The liability should be doubled following conservatism.
• B)The amount of the liability should be estimated and recorded.
• C)The liability should be ignored.
• D)The liability should be reported in the notes to the financial statements.

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Definitions:

VGA

Video Graphics Array, a standard for computer video display hardware resolution and color depth.

HDMI

High-Definition Multimedia Interface, a proprietary audio/video interface for transmitting uncompressed video data and compressed or uncompressed digital audio data from an HDMI-compliant source device.

USB Port

A Universal Serial Bus port that allows devices to be connected to a computer, facilitating data transfer and device charging.

High-Capacity

A term used to describe storage media or devices capable of holding a large amount of data.