When a Contingent Liability Exists,the Likelihood for Loss Can Be

question 60

Multiple Choice

When a contingent liability exists,the likelihood for loss can be evaluated as probable,reasonably possible,or remote.A reasonably possible loss is

• A)a loss where the chance of occurrence is slight
• B)a loss that is likely to occur
• C)a loss where the chance of occurrence is moderate
• D)falls between the chance of occurrence is slight and a loss is likely to occur

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Definitions:

Transfer Prices

Prices set for the sale of goods and services between controlled or related legal entities within an enterprise.

Market Price Approach

The market price approach is a method used to value assets based on the current market price of similar or identical assets.

Transfer Price

The price at which goods and services are transferred between departments or subsidiaries of the same company.

Cost Price Approach

A pricing methodology where the selling price of a product is determined by adding a markup to its total cost of production or acquisition.