Accounting for contingent liabilities covers three categories.(1)The future event is probable and the amount cannot be reasonably estimated.(2)The future event is remote or unlikely to recur.(3)The likelihood of the liability to occur is impossible.

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Accounting for contingent liabilities covers three categories: (1) probable and can be reasonably estimated, (2) reasonably possible, and (3) remote. The statement incorrectly describes these categories.

Accounting for Contingent Liabilities Covers Three Categories