A Contingent Liability Is Recorded Only If a Loss Is

question 38

True/False

A contingent liability is recorded only if a loss is at least reasonably possible and the amount can be reasonably estimated.

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Definitions:

Release

A promise not to sue or press a claim, or a discharge of a person from any further responsibility to act.

Neurological Disease

A condition affecting the nervous system, including the brain, spinal cord, and nerves.

Specific Performance

A legal remedy that requires a party to perform a specific act, often the fulfillment of a contract, rather than simply paying damages for failing to fulfill it.

Condition Precedent

A condition in a contract that must be met before a party's obligation becomes due.