When the Amount of a Contingent Liability Can Be Estimated

question 59

Multiple Choice

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

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

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