Contingencies and Commitments (F5:M2)

Question 1

under GAAP, when a range of possible losses is given but no amount in the range is a better estimate than the others, which amount should be accrued?

Answer 1

the lowest

Question 2

accrual and disclosure would occur when a loss contingency is considered to be ___ and the loss can be ___.

Answer 2

probable; reasonably estimated

Question 3

are gain contingencies recorded in the financial statements? How about disclosed?

Answer 3

NO

disclosed if reasonably possible (or probable) and amount can be reasonably estimated