A contingent liability is recorded by making the appropriate journal entry if the likelihood of a loss from a contingency is

Question

Quizplus · Accepted Answer

A contingency is recorded as a liability when it is probable (more likely than not) that a loss has been incurred and the amount can be reasonably estimated. If the likelihood of a loss is remote or negligible, no entry is made. If the likelihood of a loss is reasonably possible, disclosure is required but no entry is made unless a loss can be reasonably estimated.

A Contingent Liability Is Recorded by Making the Appropriate Journal