Which of the Following Circumstances Would Require a Contingent Liability

question 138

Multiple Choice

Which of the following circumstances would require a contingent liability to be recorded under generally accepted accounting principles?

• A)The liability is probable and not estimable.
• B)The liability is remote.
• C)The liability is possible.
• D)The liability is probable and estimable.

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Definitions:

Customer's Specifications

These are detailed requirements provided by the customer regarding the design, functionality, and performance of a product or service.

Distribution Center

A specialized warehouse designed to store goods, often in bulk, before they are distributed to retailers or customers.

Time Utility

The increase in the value of a product or service by having it available at the most opportune time, enhancing satisfaction or usefulness.