A Threat of Expropriation of Assets That Is Reasonably Possible

question 16

Multiple Choice

A threat of expropriation of assets that is reasonably possible, and for which the amount of loss can be reasonably estimated, is an example of a (an)

• A) Loss contingency that should be disclosed, but not accrued
• B) Loss contingency that should be accrued and disclosed
• C) Appropriation of retained earnings against which losses should be charged
• D) General business risk which should not be accrued and need not be disclosed

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Definitions:

Carrying Amount

The value at which an asset or liability is recognized on the balance sheet, calculated as its original cost minus depreciation or amortization.

Useful Life

The period over which an asset is expected to be available for use by an entity; or the number of production or similar units expected to be obtained from the asset by an entity.

Management Fee

A charge levied by an investment manager for managing an investment fund's assets, often calculated as a percentage of the assets under management.

Supplying Service

The act of providing value to customers through the delivery of services, often entailing expertise, labor, or support in various sectors like technology, hospitality, or consultancy.