Q 10: False/True

a) Companies report the amount of social security taxes withheld from employees as well as the companies matching portion as current liabilities until they are remitted to the government.

b) When the estimated future losses are given as a range and all the amounts within the range are equally possible, the maximum amount within the range should be accrued as the contingent liability.

c) Total shareholders equity reported on the balance sheet should be doubled after a 2-for-1 stock split.

d) Companies should recognize compensation expense related to stock options in the years when stock options are exercised by employees.

e) Loss contingency should be disclosed in the notes to the financial statements even if its likelihood is remote.