Which of the following sets of conditions would give rise to the accrual of a contingency under current generally accepted accounting principles?
A) Amount of loss is reasonably estimable and event occurs infrequently.
B) Amount of loss is reasonably estimable and occurrence of event is probable.
C) Event is unusual in nature and occurrence of event is probable.
D) Event is unusual in nature and event occurs infrequently.

Question

Quizplus · Accepted Answer

According to current generally accepted accounting principles, a contingency should be accrued if the amount of loss is reasonably estimable and the occurrence of the event is probable. Therefore, option B is the correct choice. Option A is incorrect because it does not mention the probability of occurrence. Option C is incorrect because the event being unusual in nature is not enough to warrant accrual of a contingency. Option D is incorrect because it also does not mention the probability of occurrence.

Which of the Following Sets of Conditions Would Give Rise