【单选题】79 On 17 March 20X7, Newthorpe’s managing director was dismissed for gross misconduct. It was decided that the managing director's salary should stop from that date, and that no redundancy or compensa...
A.
Accounting treatment: Record a provision Reason: The outflow of economic resources is probable and the amount of obligation can be reliably estimated.
B.
Accounting treatment: Record a provision Reason: The outflow of economic resources is not probable, but the prudence principle requires a provision to be recorded if the amount of obligation can be reliably estimated.
C.
Accounting treatment: No provision but disclose as a contingent liability Reason: A present obligation exists, but the outflow of economic resources is not probable.
D.
Accounting treatment: No provision but disclose as a contingent liability Reason: A possible obligation exists, depending on whether or not some uncertain future event occurs.