A loss contingency that is reasonably possible and reasonably estimable should be
A) disclosed but not accrued.
B) disclosed and accrued.
C) accrued but not disclosed.
D) neither accrued but not disclosed.
E) only disclosed if it has been settled.

Question

Quizplus · Accepted Answer

A loss contingency that is reasonably possible and reasonably estimable should be disclosed in the notes to the financial statements but not accrued in the financial statements. Accrual is reserved for contingencies that are both probable and can be reasonably estimated.

A Loss Contingency That Is Reasonably Possible and Reasonably Estimable