Question

Contingent Liabilities are not classified as Current Liability *

True or False

Answer 1

Contingent Liability :

Contingent liability is an expected loss which may or may not be accrued in future. So this is an expected liability not an actual liability. Example of contingent liability is like any law suit is filed and this is pending in court and there is chances of winning and losing the law suit.

Contingent liability is shown in notes of account of financial statement but no contingent liability is classified as current liability.

As per above, given statement is true

Answer = True