Which of the following statements regarding contingencies is true?
A) Contingencies that are not estimable should not be disclosed even if probable.
B) Contingent assets, if probable and estimable, are treated in much the same way as contingent liabilities.
C) Contingencies that are probable and estimable must be recorded before the outcome of future events.
D) The accounting principle that determines whether a contingent asset is recorded is that of materiality.

Question

Quizplus · Accepted Answer

Contingencies that are probable and estimable must be recorded in the financial statements before the outcome of future events, as per accounting standards.

Which of the Following Statements Regarding Contingencies Is True