Contingent liabilities whose ultimate payment is reasonably probable should be
A)recorded in the body of the balance sheet.
B)disclosed in the footnotes to the financial statements.
C)ignored.
D)disclosed in the auditor's report.

Question

Quizplus · Accepted Answer

Contingent liabilities whose ultimate payment is reasonably probable should be disclosed in the footnotes to the financial statements. This is because they do not meet the criteria for recording as a liability on the balance sheet, but their potential impact on the company's financial position and performance should be disclosed to users of the financial statements.

Contingent Liabilities Whose Ultimate Payment Is Reasonably Probable Should Be