Which of the Following Is an Example of a Loss

question 23

Multiple Choice

Which of the following is an example of a loss contingency that should be disclosed in a footnote to a company's financial statements?

• A)The president of the company has threatened to resign if the board of directors does not vote to increase executive salaries.
• B)A lawsuit has been brought against the company,but the company hopes to prevail in the suit and thereby avoid any liability.
• C)The allowance for uncollectible accounts receivable is estimated at $200,000.
• D)The company owns special-purpose machinery which,if sold,would probably bring a price less than its current book value.

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Definitions:

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The act of adhering to laws, regulations, standards, or guidelines set forth by governing bodies or industry organizations.

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