When a Company Encounters a Contingent Liability That Is Remote

question 14

Multiple Choice

When a company encounters a contingent liability that is remote in likelihood,the company should:

• A)include a description in the foot notes to the financial statements.
• B)record the amount of the liability times the probability of its occurrence.
• C)record the liability and estimated amount of the loss on the balance sheet.
• D)omit the information about the contingent liability from its financial statements and footnotes.

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Definitions:

Binocular Vision

Vision with increased depth perception from two eyes set next to each other, allowing their visual fields to overlap.

Stereoscopic Vision

Complete three-dimensional vision, or depth perception, from binocular vision and nerve connections that run from each eye to both sides of the brain, allowing nerve cells to integrate the images derived from each eye.

Arboreal Life

Describes the lifestyle of organisms that live in trees, involving adaptations for climbing and navigating through the forest canopy.

Limb Pattern

Refers to the spatial arrangement and morphological development of limbs in organisms, often studied in the context of evolutionary biology and embryology.