A Loss Contingency That Is Remote and Cannot Be Reasonably

question 69

Multiple Choice

A loss contingency that is remote and cannot be reasonably estimated

• A) may be disclosed in a note to the financial statements.
• B) must be disclosed in a note to the financial statements.
• C) must be reported in the body of the financial statements.
• D) is permitted to be reported in the body of the financial statements.

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Definitions:

Interest Payable

A liability account showing the amount of interest expense that has been incurred but not yet paid as of the balance sheet date.

Equity Method

An accounting technique used to record an investor's earnings in proportion to their ownership stake in a company.

Periodic Net Income

Periodic net income refers to the total earnings of a company, after accounting for all expenses and taxes, over a specific financial reporting period.

Brokerage Fees

Charges that are paid to a broker for executing transactions or providing specialized services.