In Accounting for a Contingent Liability, If the Likelihood of the Obligation

question 130

Multiple Choice

In accounting for a contingent liability, if the likelihood of the obligation is remote, a company should

• A) recognize the liability and report it on the balance sheet.
• B) provide disclosure in the footnotes to the financial statements.
• C) report an allowance account on the balance sheet.
• D) do nothing.

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