Reference no: EM132835599

Problem 1: A contingent liability is recorded in the accounting records

a) if the contingency has not already been disclosed in the notes to the financial statements.

b) if it will possibly become an actual liability, and the exact amount is unknown.

c) if a reasonable estimate of the expected loss can be determined and if it is probable.

d) under no circumstances.

Problem 2: The carrying amount of an asset is the difference between the

a) cost of the asset and the amount of depreciation expense for the year.

b) cost of the asset and the accumulated depreciation to date.

c) replacement cost of the asset and its historical cost.

d) proceeds received from the sale of the asset and its original cost.