A contingent liability that will probably become an actual liability,and can be reasonably estimated,must be recorded as an expense.

Question

Quizplus · Accepted Answer

According to Generally Accepted Accounting Principles (GAAP), a contingent liability that is probable and can be reasonably estimated must be recorded as an expense. This is because it is likely to result in an actual liability in the future, and therefore needs to be accounted for in the current financial statements.

A Contingent Liability That Will Probably Become an Actual Liability,and