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    Question

    Which of the following situations requires recognition

    of provision?
    A Possible obligation from past event, not probable Correct Answer Incorrect Answer
    B Present obligation with probable outflow and reliable estimate possible Correct Answer Incorrect Answer
    C Future operating losses expected Correct Answer Incorrect Answer
    D Remote obligation Correct Answer Incorrect Answer
    E Contingent asset likely to arise Correct Answer Incorrect Answer

    Solution

    Provision is recognized only when: present obligation + probable outflow + reliable estimate.

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