When the Amount of a Contingent Liability Cannot Be Estimated

question 48

Multiple Choice

When the amount of a contingent liability cannot be estimated and its possible but not probable,the company should:

• A)include a description in the footnotes 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:

Transaction Selling

A sales approach focused on completing individual sales or transactions without necessarily building long-term customer relationships.

Customer Satisfaction

Customer satisfaction is a measure of how well a product or service meets or exceeds the expectations of the customer.

Relationship Selling

A sales approach focusing on building long-term relationships with customers rather than on one-time transactions.

Consultative Selling

A sales approach focusing on building a relationship with the customer, understanding their needs, and offering solutions that meet those needs.