When the Amount of a Contingent Liability Cannot Be Reasonably

question 11

Multiple Choice

When the amount of a contingent liability cannot be reasonably estimated but its likelihood is probable,the company should:

• A)include a description in the notes to the financial statements.
• B)record the amount of the liability times the probability of its occurrence.
• C)record the amount of the liability as a long-term liability on the balance sheet.
• D)exclude the information about the contingent liability from its financial statements and footnotes.