A contingent liability's dollar amount does not get reported on the balance sheet if
A)the probability that the event will occur is low and if the amount cannot be reasonably estimated.
B)the probability that the event will occur is high and if the amount cannot be reasonably estimated.
C)the probability that the event will occur is low or if the amount cannot be reasonably estimated.
D)the probability that the event will occur is high only.
E)the amount cannot be reasonably estimated only.

Question

Quizplus · Accepted Answer

A contingent liability is not reported on the balance sheet if the probability of the event occurring is low or if the amount cannot be reasonably estimated. This allows for the exclusion of highly uncertain or indeterminable liabilities from affecting the financial statements' accuracy.

A Contingent Liability's Dollar Amount Does Not Get Reported on the Balance