Liabilities Which Fail the Recognition Criteria and Where the Possibility

question 13

Multiple Choice

Liabilities which fail the recognition criteria and where the possibility of an outflow is remote should:

• A) be recognised as an accrual
• B) be recognised as a provision
• C) be recognised as a contingent liability
• D) not be recognised in the financial statement at all

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Definitions:

Chi-squared Distribution

A statistical distribution showing how the sum of squared independent standard normal variables is distributed, often used in hypothesis testing.

Goodness-of-fit Test

A statistical test used to determine if sample data fits a distribution from a population with a normal distribution.

Contingency Table

A type of table used in statistics to summarize the relationship between several categorical variables, showing the frequencies at which certain combinations of variables occur.

Two-tail Test

A statistical test that determines if there are any significant differences between two population means or parameters, checking for deviations in two opposite directions from the null hypothesis.