Adjustment of the financial statement may be necessary if the contingent liability is:
A) Remote.
B) Probable.
C) Reasonably possible.
D) None of the above

Question

Quizplus · Accepted Answer

Contingent liabilities that are probable may require adjustment of the financial statement, while those that are remote or reasonably possible would not require adjustment unless disclosure is necessary. Therefore, option B is the correct answer.

Adjustment of the Financial Statement May Be Necessary If the Contingent