Every Contingent Liability Must Be Recorded

question 31

True/False

Every contingent liability must be recorded.

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Definitions:

GAAP

Generally Accepted Accounting Principles, the standard framework of guidelines for financial accounting used in any given jurisdiction, notably in the United States.

Net Assets

The difference between total assets and total liabilities, representing the residual interest in the assets of an entity after deducting liabilities.

Unrecognized Prior Service Cost

Refers to costs from past services not yet recognized in financial statements for pension plans.

Accrued/Prepaid Pension Cost

Expenses related to pension plans that have been incurred but not yet paid, or paid in advance of the period to which they apply.