Chapter 22 (old text book). The answer to multiple question no.5 on the website of the book shows the first bullet as the correct answer. Shouldn’t the answer be the second bullet?
At first sight, I too make the mistake of thinking that the answer is the second bullet. But upon reading it more carefully, the answer should indeed be the first bullet. The website is right. The contingent liability is “probable” and the amount can be “reasonably estimated”. The question is tricky in that instead of saying that the amount can be reasonably estimated, it uses the phrase “the amount…is only reasonably possible …” Therefore, the correct answer is the first bullet, that is, the contingent liability needs to be adjusted, specifically accrued in the financial statement.
Related Questions
- Chapter 22 (old text book). The answer to multiple question no.5 on the website of the book shows the first bullet as the correct answer. Shouldn’t the answer be the second bullet?
- I have more questions but the question nor answer is not listed here on the website nor in the book "I’m a New York State Notary, now what do I do?"?
- Is the new book related to the cancelled Animation Masterclass text thats mentioned on your website?
