When a Company Encounters a Contingent Liability That Is Remote

question 14

Multiple Choice

When a company encounters a contingent liability that is remote in likelihood,the company should:

• A)include a description in the foot notes to the financial statements.
• B)record the amount of the liability times the probability of its occurrence.
• C)record the liability and estimated amount of the loss on the balance sheet.
• D)omit the information about the contingent liability from its financial statements and footnotes.

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Definitions:

Overcrowding

A situation where too many individuals occupy a limited space, leading to potential stress, discomfort, and conflict.

Cross-Flows

Movements or exchanges of resources, information, or individuals between different sectors or groups, often enhancing diversity and innovation.

Queues

Lines or sequences of people or vehicles awaiting their turn to be attended to or to proceed.

Social Movements

Collective, organized efforts by groups of people to promote or resist change in society based on shared objectives and ideologies.