Which of the Following Would NOT Be Shown as a Contingent

question 9

Multiple Choice

Which of the following would NOT be shown as a contingent liability?

• A) estimated future cost of providing superannuation for work already carried out by employees
• B) a dispute with the taxation department where legal advice suggests that the company will win the dispute
• C) a company providing a guarantee to a lender for a loan taken out by a subsidiary company where a default on the loan is very unlikely
• D) company defending a claim for unspecified damages where the amount of the claim cannot be reliably measured.

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Definitions:

Percentage Increase

A measure of how much a quantity has grown, expressed as a percentage of its previous value.

Financial Statement Analysis

The process of examining and interpreting a company’s financial statements to gauge its performance, strength, and profitability.

Circular Analysis

A method of analysis in which variables are interconnected through a series of equations, allowing for multiple variables to be solved simultaneously.

Horizontal Analysis

A financial analysis technique that involves the comparison of historical financial data over a series of reporting periods, to identify trends and growth patterns.