When the Amount of a Contingent Liability Cannot Be Estimated

question 122

Multiple Choice

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

• A) include a description in the footnotes 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) omit the information about the contingent liability from its financial statements and footnotes.

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Definitions:

Asperger Syndrome

A developmental disorder characterized by significant difficulties in social interaction and nonverbal communication, along with restricted and repetitive patterns of behavior and interests.

Social Deprivation

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Infantile Amnesia

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