A Contingent Liability Should Be Disclosed in a Note to the Financial

question 42

Multiple Choice

A contingent liability should be disclosed in a note to the financial statements rather than being recorded if:

• A)The likelihood of a loss is remote.
• B)The likelihood of a loss is reasonably possible.
• C)The likelihood of a loss is probable.

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Definitions:

Consequence

The result or effect of an action or condition.

Voluntary Behaviors

Actions undertaken by choice and without external coercion, reflecting autonomy and personal preference.

Antecedents

Factors or events that exist or occur before a specific behavior, showing a causal relationship.

Classical Conditioning

A method of learning that involves forming connections between a stimulus from the environment and one that occurs naturally.