Question

If a loss contingency is reasonably possible or the amount cannot be reasonably estimated, _______.

A disclosure should occur in both the financial statements and the notes to the financial statements

B disclosure should occur in the financial statements only

C then no disclosure is required only

D a disclosure in the notes is required

Answer 1

Answer:- D i,e a disclosure in the notes is required

Reason: A contingent liability is a liability that may occur depending on the outcome of an uncertain future event. A contingent liability is recorded if the contingency is likely and the amount of the liability can be reasonably estimated, in accounting books only financial transaction are entered if the amount is not reasonably certain but important for the stakeholders of the company then it is shown as a footnote or in notes to the accounts section.

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