The Journal Entry to Record a Contingent Liability Requires a Debit

question 21

True/False

The journal entry to record a contingent liability requires a debit to a loss (or expense)account and a credit to a liability.

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Definitions:

Maturity Value

The amount payable to the investor at the end of a fixed term investment, including the principal and the interest.

Equal Payments

Recurrent payment amounts that are the same in total over a specified period, common in loans and amortizations.

Obligation

A duty or commitment to do something, such as repay a loan or fulfill a contract.

Financial Functions

Mathematical formulas used in finance to analyze and calculate financial figures such as interest rates, returns, payments, and the value of investments.