A Contingency Was Evaluated at Year-End

question 6

Multiple Choice

A contingency was evaluated at year-end.Management felt it was probable that this would become an actual liability and the amount could be reasonably estimated.If this was not reported on the balance sheet or in the notes to the financial statements,what is the effect on the financial reporting of the company?

• A) There would be no effect.
• B) The liabilities on the balance sheet would be understated.
• C) The information about the transaction would be inadequately disclosed in the notes.
• D) The net income of the company would be understated.

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Definitions:

Erikson's Emphasis

Focus on the developmental stages of the human lifespan, proposing that individuals go through eight stages of psychosocial development from infancy to late adulthood.

Freud's Approaches

Refers to the psychoanalytic theories and techniques developed by Sigmund Freud, which emphasize unconscious processes, childhood experiences, and defense mechanisms in shaping personality.

Psychosocial Development

A theory that proposes eight stages through which a healthily developing human should pass from infancy to late adulthood.

Intimate Relationships

Deeply personal and close connections between people, often involving emotional, physical, or sexual intimacy.