Where are the contingent items disclosed in the financial statements?
A)On the assets side of the balance sheet.
B)On the liabilities side of the balance sheet.
C)As footnotes to financial statements.
D)In the income statement.

Question

Quizplus · Accepted Answer

Contingent items, such as potential legal claims or pending lawsuits, are typically disclosed in the footnotes to the financial statements. This is because they may not be actual liabilities, but could become liabilities in the future. It is important for investors and stakeholders to be aware of these potential liabilities when analyzing the financial statements.

Where Are the Contingent Items Disclosed in the Financial Statements