Which of the Following Is the Proper Treatment for a Contingency

question 78

Multiple Choice

Which of the following is the proper treatment for a contingency that is probable but the exact amount of which is not known? The amount can be estimated.

• A) The liability should be doubled following conservatism.
• B) The liability should be estimated and recorded.
• C) The liability should be ignored.
• D) The liability should be reported in the notes to the financial statements.

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Definitions:

Four Times

A phrase indicating a quantity or occurrence that is fourfold in number or frequency.

Two Times

Referring to an occurrence or action happening twice or a multiplication by two.

Mood Disorders

Psychological conditions characterized by a disturbance in an individual's emotional state, which can significantly impact daily functioning.

Neurotic Disorders

Mental disorders characterized by anxiety, depression, or other feelings of distress that are not due to psychosis.