Which of the Following Statements Concerning Contingencies Is True

question 25

Multiple Choice

Which of the following statements concerning contingencies is true?

• A)Contingent liabilities are always recorded in the body of the financial statements.
• B)Contingent liabilities are always disclosed in the footnotes to the financial statements.
• C)Contingent gains are sometimes disclosed in the body of the financial statements.
• D)Contingent gains are sometimes disclosed in the footnotes to the financial statements.

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Definitions:

Units-Of-Activity

A depreciation method that allocates expense based on the actual usage or activity level of an asset.

Depreciation Method

A systematic approach used to allocate the cost of a tangible asset over its useful life, such as straight-line or declining balance methods.

Double-Declining-Balance

A method of accelerated depreciation which doubles the straight-line depreciation rate.

Straight-Line Rate

The straight-line rate is a method of depreciation that evenly spreads the cost of an asset over its useful life.