Uncertainties Such as Natural Disasters

question 118

Multiple Choice

Uncertainties such as natural disasters:

• A) Are not contingent liabilities because they are future events not arising from past transactions or events.
• B) Are contingent liabilities because they are future events arising from past transactions or events.
• C) Should be disclosed because of their usefulness to financial statements.
• D) Are estimated liabilities because the amounts are uncertain.
• E) Arise out of transactions such as debt guarantees.

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Definitions:

Piagetian Principle

A concept from Jean Piaget's theory, indicating that cognitive development occurs through a series of stages, characterized by distinct ways of thinking and understanding the world.

Clay

A natural, earthen material composed of fine-grained minerals, used in arts and crafts for sculpting and pottery.

Conservation

In cognitive development, the understanding that certain properties of objects can remain the same despite changes in their form or appearance.

Cognitive Ability

The capacity of an individual to perform the various mental activities most closely associated with learning and problem solving.