A Contingency Must Be Accrued in the Accounts and Reported

question 17

Multiple Choice

A contingency must be accrued in the accounts and reported in the financial statements when

• A) the amount of the loss can be reliably estimated and it is probable that an asset is impaired or a liability incurred.
• B) it is evident that an asset has been impaired or a liability has been incurred even though the amount of the loss cannot be reliably estimated.
• C) it is not certain that funds will be available to settle damages that may arise from a pending lawsuit.
• D) a loss is expected and its amount is uncertain.

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Definitions:

Mutual Commitment

A shared agreement or pledge between individuals or groups to pursue a common goal or uphold a certain set of values or behaviors.

Emotional Attachments

The deep and enduring emotional connections that tie individuals to significant others in their lives.

Matching T-shirts

T-shirts with similar designs or messages worn by a group of individuals to signify unity or belonging.

Storge

Love that is slow-burning, peaceful, and affectionate.