Contingent liabilities must be:
A) material and imminent, or they should not even be mentioned.
B) disclosed in the footnotes.
C) recorded on the balance sheet between current and long- term liabilities.
D) recorded in the ledger, or no disclosure is required.

Question

Quizplus · Accepted Answer

Contingent liabilities must be disclosed in the footnotes of the financial statements. They are potential obligations that arise from past events but are not certain to occur. It is important to disclose them so that users of the financial statements can understand the potential impact on the company's financial position and performance. They are not recorded on the balance sheet unless they are probable and can be reasonably estimated.

Contingent Liabilities Must Be