A Contingent Liability Should Be Recorded When

question 34

Multiple Choice

A contingent liability should be recorded when

• A) any lawsuit is actually filed against a company.
• B) it is certain that funds are available to pay the amount of the claim.
• C) it is probable that a liability has been incurred even though the amount of the loss cannot be reasonably estimated.
• D) the amount of the loss can be reasonably estimated and it is probable prior to issuance of financial statements that a liability has been incurred.

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Definitions:

Background Color

The color filling the back area of a document, webpage, or application interface, behind all text, images, or objects.

Conditional Formatting

A feature in data visualization and spreadsheet software that changes the appearance of cells based on certain conditions, making it easier to visually assess data.

Date Formats

Conventions for representing dates in writing, which vary widely around the world, typically including day, month, and year in various orders.

Percentage Style

A format option in spreadsheet and other applications that displays numbers as percentages, usually multiplying the cell value by 100 and adding a percent sign.