Uncertainties Such as Natural Disasters That Could Happen in the Future

question 128

Multiple Choice

Uncertainties such as natural disasters that could happen in the future:

• A)Are not contingent liabilities because they are future events not arising out of past transactions or events.
• B)Are contingent liabilities because they are future events arising from past transactions or events.
• C)Should be disclosed because of their usefulness to financial statements.
• D)Are estimated liabilities because the amounts are uncertain.
• E)Arise out of transactions such as debt guarantees.

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Definitions:

Slight Sunburn

Mild overexposure of the skin to ultraviolet light from the sun, causing redness and discomfort but usually healing without serious consequences.

Venous Thrombosis

The formation of a blood clot within a vein, which restricts blood flow and can lead to swelling and pain, potentially causing serious health problems if dislodged.

Increased Immunity

An enhanced state of the immune system's ability to fight off pathogens and diseases.

Local Edema

Swelling caused by the accumulation of fluid in a specific area of the body, often due to inflammation or injury.