When the Amount of a Contingent Liability Can Be Reasonably

question 127

Multiple Choice

When the amount of a contingent liability can be reasonably estimated and its likelihood is probable,the company should:

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

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Definitions:

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Any disease or condition that affects the body's ability to function normally, ranging from mild to severe.

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