Uncertainties Such as Natural Disasters Are

question 5

Multiple Choice

Uncertainties such as natural disasters are:

• A) Disclosed because of their usefulness to financial statements.
• B) Contingent liabilities because they are future events arising from past transactions or events.
• C) Estimated liabilities because the amounts are uncertain.
• D) Not contingent liabilities because they are future events not arising from past transactions or events.
• E) Reported in the same way as debt guarantees.

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Definitions:

Stock Split

A corporate action to increase the number of outstanding shares by dividing each share, which typically reduces the share price.

Ratio

A numerical comparison between two or more amounts that indicates their relative sizes, often used in finance to assess financial health.

Par Value Stock

A legal face value assigned to a share of stock as specified in the corporate charter, which bears no relationship to its market value.

No-par Value Stock

Stock issued without a specified face value, leaving the issued price to be determined by the company's board of directors.