A contingent liability is recorded in the accounting records
A)if a reasonable estimate of the expected loss can be determined and if it is probable.
B)if the contingency has not already been disclosed in the notes to the financial statements.
C)if the amount can be estimated, but the possibility of occurrence is remote.
D)under no circumstances.

Question

Quizplus · Accepted Answer

Contingent liabilities are recorded in the accounting records if a reasonable estimate of the expected loss can be determined and if it is probable. This is in line with the Generally Accepted Accounting Principles (GAAP).

A Contingent Liability Is Recorded in the Accounting Records