If the likelihood of a loss is reasonably possible rather than probable,we record no entry,but make full disclosure in a footnote to the financial statements to describe the contingency.

Question

Quizplus · Accepted Answer

This statement is in accordance with the Generally Accepted Accounting Principles (GAAP) which state that if the likelihood of a loss is only reasonably possible, then no entry should be recorded but full disclosure should be made in the footnotes of the financial statements.

If the Likelihood of a Loss Is Reasonably Possible Rather