Contingent Liabilities Must Be

question 28

Multiple Choice

Contingent liabilities must be:

• A) material and imminent, or they should not even be mentioned.
• B) disclosed in the footnotes.
• C) recorded on the balance sheet between current and long- term liabilities.
• D) recorded in the ledger, or no disclosure is required.

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Definitions:

Adverse Possession

A legal principle allowing a person to claim ownership of land or property through continuous occupation over a certain period without the permission of the original owner.

Title

The lawful entitlement to possess, hold, or utilize property.

Restrictive Covenant

A clause in a contract that limits certain actions or uses of property to protect business interests or property value.

Residential Purposes

The use of property for dwelling or living areas for individuals or families, as opposed to commercial or industrial purposes.