When the amount of a contingent liability can be reasonably estimated and its likelihood is probable,the company should:
A)include a description in the notes to the financial statements.
B)record the estimated amount of the liability times the probability of its occurrence.
C)record the estimated amount of the liability on the balance sheet.
D)exclude the information about the contingent liability from its financial statements and notes.

Question

Quizplus · Accepted Answer

If a contingent liability is probable and it can be reasonably estimated,the liability is recorded on the balance sheet.

When the Amount of a Contingent Liability Can Be Reasonably