Uncertainties Such as Natural Disasters

question 161

Multiple Choice

Uncertainties such as natural disasters:

• 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:

Cartel

An association of independent businesses organized to control production, pricing, and marketing of goods to minimize competition.

U.S. Antitrust Laws

Laws enacted by the U.S. to protect consumers from predatory business practices by ensuring that fair competition exists in an open-market economy.

Federal Trade Commission Act

A U.S. federal law established in 1914 to promote consumer protection and eliminate and prevent anticompetitive business practices.

Anticompetitive Behavior

Actions by businesses aimed at undermining competition, often through unfair practices, to maintain or acquire market dominance.