A contingent liability should be recorded only when:A. It is possible and the amount is estimableB. It is probable and the amount is estimableC. It is certain to occurD. Management decides it’s important need help

A contingent liability should be recorded only when:A. It is possible and the amount is estimableB. It is probable and the amount is estimableC. It is certain to occurD. Management decides it’s important need help

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8MC: Which of the following best describes a contingent liability that is likely to occur but cannot be...

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Question

A contingent liability should be recorded only when:
A. It is possible and the amount is estimable
B. It is probable and the amount is estimable
C. It is certain to occur
D. Management decides it’s important

need help

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Similar questions

When recognizing a contingent liability, if the future event is probable (likely) and the amount can be reasonably estimated, what are we required to do? A.Group of answer choices B.Do not record or disclose C.Record the liability D. Disclose in notes on financial statements
Under IFRS, a liability is recorded if the chance of occurrence is Select one: A. probable. B. likely. C. undeterminable. D. unlikely.
A contingent liability should be recorded in the financial statements when the: Select one: a. Contingent event is probable and the amount can be reasonably estimated. b. Contingent event is probable regardless of whether the amount can be reasonably estimated c. Contingent event is reasonably possible or probable regardless of whether the amount can be reasonably estimated d. Contingent event is reasonably possible and the amount can be reasonably estimated
Which of the following best describes a contingent liability that is likely to occur but cannot be reasonably estimated? A. reasonably possible B. probable and estimable C. probable and inestimable D. remote
Which of the following best describes a contingent liability that is unlikely to occur? A. remote B. probable and estimable C. reasonably possible D. probable and inestimable
When is a contingent liability is reported? Select one: when the likelihood of the loss is reasonably possible and a range of outcomes can be estimated when the future events will possibly occur, and the amount of the loss is material when the amount of the loss can be reasonably estimated when the likelihood of the loss is probable and the amount of the loss can be reasonably estimated
An obligation that is contingent on the occurrence of a future event should be reported in the statement of financial position as a liability if: a. The amount of the obligation can be reasonably estimated. b. The future event is likely to occur. c. The occurrence of the future event is at least reasonably possible and the amount is known d. The occurrence of the future event is probable and the amount can be reasonably estimated.
Explain thoroughly why it is the answer.
Thank you so much!!
TRUE OR FALSE 1. A liability can result from past, present or future events
If a contingent liability is probable but estimable only within a range, what amount, if any, should the firm report?
When should a contingent liability be recognized and reported on the financial statements? A. Reporting contingent liabilities do not require they be probable or reasonably estimated B. When the contingent liability is probable C. When a reasonable estimation can be made of the amount owed D. When the contingent liability is probable and a reasonable estimation can be made of the amount owed