Contingent liabilities must be recorded if:
A) The future event is reasonably possible but not estimable.
B) The amount owed cannot be reasonably estimated.
C) The future event is probable but not estimable.
D) The future event is remote.
E) The future event is probable and the amount owed can be reasonably estimated.

Question

Quizplus · Accepted Answer

Contingent liabilities must be recorded if the future event is probable and the amount owed can be reasonably estimated. This means that there is a high likelihood of the event occurring and the potential financial impact can be reasonably estimated. If either of these conditions is not met, then the liability cannot be recognized in the financial statements.

Contingent Liabilities Must Be Recorded If