Which statement is correct?
A)Contingencies arise from future events.
B)The amount to be paid for contingencies is known or reasonably estimable.
C)Current liabilities arise from future events.
D)The amount to be paid for current liabilities is known or reasonably estimable.

Question

Quizplus · Accepted Answer

Current liabilities are obligations that are expected to be settled within one year or the operating cycle of a business, whichever is longer. They arise from past events and the amount to be paid is known or reasonably estimable. On the other hand, contingencies are potential obligations that arise from future events that are uncertain. The amount to be paid for contingencies is not known or reasonably estimable until the event occurs.

Which Statement Is Correct