Chapter 10, Question 16: What are contingent liabilities? List three examples of contingent liabilities. When should contingent li-abilities be recorded in the accounts?
Chapter 10, Question 16: What are contingent liabilities? List three examples of contingent liabilities. When should contingent li-abilities be recorded in the accounts?
Chapter 10, Question 16: What are contingent liabilities? List three examples of contingent liabilities. When should contingent li-abilities be recorded in the accounts?
Chapter 10, Question 16: What are contingent liabilities? List three examples of contingent liabilities. When should contingent li-abilities be recorded in the accounts?
Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.
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