Multiple Choice
The Music House issues a contract to a new recording artist to produce a number of albums over the next five years at $1 million per album. This situation is an example of:
A) A contingent liability which should be recorded in the accounting records.
B) A contingent liability requiring footnote disclosure.
C) A provision, since the number of albums to be produced is not yet determined.
D) A commitment which, if material, may be disclosed in a footnote.
Correct Answer:
Verified
Correct Answer:
Verified
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