Which type of contingent liability would most likely be reported on a balance sheet prepared in accordance with GAAP?
A)Remote contingent liability
B)Reasonably possible contingent liability
C)Probable contingent liability that can be estimated
D)Quite likely contingent liability

Question

Quizplus · Accepted Answer

If the loss is probable and can be reasonably estimated,the liability and estimated loss is recorded in a journal entry.If the likelihood of loss is only reasonably possible,no journal entry is recorded;the contingent liability is disclosed in the notes to the financial statements.

Which Type of Contingent Liability Would Most Likely Be Reported