Asked by Hailey Horner on Jun 14, 2024
Verified
In order to be a recorded contingent liability, the liability must be possible and easily estimated.
Contingent Liability
A potential financial obligation that may arise in the future, depending on the outcome of a specific event, such as lawsuits or warranty claims.
- Acknowledge the criteria for recording contingent liabilities.
Verified Answer
DD
Daval DavisJun 18, 2024
Final Answer :
False
Explanation :
For a contingent liability to be recorded in financial statements, it must be both probable and the amount can be reasonably estimated.
Learning Objectives
- Acknowledge the criteria for recording contingent liabilities.