Indicate Whether Each of the Following Statements About Contingent Liabilities

question 21

Short Answer

Indicate whether each of the following statements about contingent liabilities is true or false.
1. If the likelihood of a future obligation from a contingent liability is remote, a company does not report it on the financial statements or disclose it in the notes to the financial statements
2. If a company has a contingent liability where the future obligation is deemed probable but the amount cannot be estimated, the liability should be disclosed in the footnotes to the financial statements
3. Employees' vacation pay is a contingent liability that usually should be recognized on the financial statements
4. If a customer was injured while using a company's product, the company might need to disclose a contingent liability
5. If a company has a contingent liability where the future obligation is deemed possible, the liability should be reported on the balance sheet

---

Definitions:

Cardio Health

Refers to the well-being of the heart and the circulatory system, emphasizing the importance of maintaining a healthy lifestyle for cardiovascular fitness.

Consumer Reports

Independent, expert reviews and evaluations of consumer products and services, aimed at helping consumers make informed purchasing decisions.

Air-Conditioning System

A mechanical system designed to control the temperature, humidity, and air quality in indoor settings.

Recommendation Report

A document that presents recommendations based on research or analysis, aimed at assisting decision-making in organizations or projects.