Question

A contingent liability should be recorded in the accounts

A.if the amount can be reasonably estimated.

B.if the amount is due in cash within one year.

C.if the related future event will probably occur.

D.both b and c.

E.both a and c.

Answer 1

Answer : Option. E. both a and c. Is cottect

Explanation

Contingent liability should be recorded in the accounts  

If the amount can be reasonably estimated

And

if the related future event will probably occur

a contingent liability is a potential liability that may occur depending on the outcome of an uncertain future event.It should be recorded in income statement as expense or loss and in the balance sheet it shoud be recorded as liability.

It is also called potential loss. That may or may not be happen because of the uncertain future event . Some examples are potential lawsuits, product warranties etc.