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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.


Definitions:

Straight-Line Depreciation

A method of allocating the cost of a tangible asset evenly over its useful life.

Residual Value

The estimated value of an asset at the end of its useful life, often considered in depreciation calculations.

Depreciation Expense

The cost allocated to reflect the reduction in value of a tangible asset over its useful life, as part of the wear and tear or obsolescence.

Depreciation

A method of allocating the cost of a physical or tangible asset over its expected usable life to account for decreases in value over time.

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