A Contingency Was Evaluated at Year-End and Considered to Have

question 9

True/False

A contingency was evaluated at year-end and considered to have a remote possibility of becoming an actual liability.If this is not reported on the balance sheet or in the notes to the financial statements,it could be considered a violation of generally accepted accounting principles.

---

Definitions:

Bankruptcy Act

Legislation governing the process through which individuals or entities unable to meet their financial obligations can seek relief from some or all of their debts.

List of Creditors

A documented record of all individuals or entities to whom a debtor owes money, often compiled in bankruptcy proceedings.

Insiders

Individuals within or connected to an organization who possess confidential information, especially pertaining to stock trading.

Voidable Transfer

A transaction that can be declared invalid by one of the parties involved due to reasons such as fraud or undue influence.