When the Amount of a Contingent Liability Can Be Estimated

question 58

Multiple Choice

When the amount of a contingent liability can be estimated and its likelihood is possible but not 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 liability and estimated amount of the loss on the balance sheet.
• D)omit the information about the contingent liability from its financial statements and footnotes.

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Definitions:

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