If Management Can Estimate the Amount of Loss That Will

question 65

Multiple Choice

If management can estimate the amount of loss that will occur due to litigation against the company,and the likelihood of the loss is reasonably possible,a contingent liability should be

• A)Disclosed,but not reported as a liability.
• B)Disclosed and reported as a liability.
• C)Neither disclosed nor reported as a liability.
• D)Reported as a liability,but not disclosed.

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Definitions:

Elasticity

The capacity of a material or body to return to its original shape after being stretched or compressed.

Smooth Muscles

Involuntary, non-striated muscles found in the walls of internal organs and blood vessels, controlling their movements.

Voluntary Muscles

Muscles that can be consciously controlled by the individual, such as skeletal muscles that move parts of the body.

Cramp

A sudden, involuntary contraction of a muscle or group of muscles causing pain.