A Contingent Liability Is Recognized When Any Likelihood of Loss

question 103

True/False

A contingent liability is recognized when any likelihood of loss exists and the amount can be reasonably estimated.

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Definitions:

Marginal Cost

The augmentation in cost due to the manufacture of one additional unit of a product or service.

Total Variable Cost

The sum of all costs that vary with the level of output, including materials and labor directly involved in production.

Output

The quantity of goods or services produced in a given period by a firm, industry, or country.

Total Cost

The combined amount of all expenses and costs associated with the production and sale of a good or service.