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:

Particular Environment

Refers to a specific or unique environmental setting where living organisms interact and environmental conditions prevail.

Uniformly Distributed

Describes how items or values are spread out equally across a given area or volume, not clustering more densely in one part than in others.

Asexual Reproduction

Reproductive mode of eukaryotes by which offspring arise from a single parent only.

Organizational Factor

Elements within an organization that affect its operation and performance, including leadership, culture, and structure.