A contingent liability, which is significant, probable, and can be reasonably estimated:
A)should be disclosed in a note to the financial statements.
B)should be reported as a provision in the body of the financial statements.
C)may be reported in the body of the financial statements.
D)should not be reported or disclosed.

Question

Quizplus · Accepted Answer

When a contingent liability is significant, probable, and can be reasonably estimated, it should be reported as a provision in the body of the financial statements according to accounting standards. This ensures that the financial statements provide a true and fair view of the entity's financial position.

A Contingent Liability, Which Is Significant, Probable, and Can Be