A Contingent Liability Should Be Disclosed in the Notes to the Financial

question 85

True/False

A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense)will occur.

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Definitions:

Market Price

The current value at which a good or service can be bought or sold in a marketplace.

User Costs

The costs incurred by using an asset or resource, including depreciation, maintenance, and opportunity cost of capital.

Nonrenewable Resource

Natural resources such as coal, oil, and natural gas that cannot be replenished within a human lifetime once consumed.

Mining Firm

A company involved in the extraction of minerals, ores, and other geological materials from the earth.