A contingent liability that has a remote chance of occurrence and an uncertain amount should be:
A)disclosed in a note to the financial statements.
B)accrued with a journal entry.
C)either disclosed in a note or accrued with a journal entry.
D)ignored until the liability materializes.

Question

Quizplus · Accepted Answer

Contingent liabilities that have a remote chance of occurrence are generally not required to be disclosed in financial statements or accrued with a journal entry. They are often considered too uncertain or insignificant to warrant specific mention or accounting treatment until they become more probable or the amount becomes more certain.

A Contingent Liability That Has a Remote Chance of Occurrence