Under the RBR system of risk-based reasoning for accounting estimates, in the ________ region, the probability of payoff is 1.00 to (one minus acceptable AccR).
A) ignore
B) record
C) heuristic
D) disclose

Question

Quizplus · Accepted Answer

Under RBR system, the risk of not recording an estimate is based on the Acceptable Accounting Range (AccR). In the region where the probability of payoff is 1.00 to (one minus acceptable AccR), recording the estimate is the best choice. This ensures that the estimate is recognized in the financial statements, and the risk associated with not recording the estimate is low. Therefore, the correct choice is to record the estimate (Option B).

Under the RBR System of Risk-Based Reasoning for Accounting Estimates