FASB established the use of the terms "probable," "reasonably possible," and "remote." It adopted these terms because
A) the available statistical techniques are not exact enough
B) the likelihood of ccurrence of future events can vary over a wide range
C) future gains are not easy to estimate
D) unnecessary estimates should not be recorded in the financial records

Question

Quizplus · Accepted Answer

FASB established the use of the terms "probable," "reasonably possible," and "remote" because the likelihood of occurrence of future events can vary over a wide range. These terms provide a framework for management to communicate the level of uncertainty associated with potential future events.

FASB Established the Use of the Terms "Probable," "Reasonably Possible