Even liabilities of unknown amounts are required to be placed on the Balance Sheet.

Question

Quizplus · Accepted Answer

Liabilities of unknown amounts, such as potential lawsuits or claims, are required to be disclosed on the balance sheet in accordance with the principle of full disclosure. This is typically done by providing a footnote or disclosure accompanying the financial statements that explains the nature of the liability and the potential range of outcomes.

Even Liabilities of Unknown Amounts Are Required to Be Placed