The disclosure of a contingent liability only in the footnotes designates that the possibility of an actual obligation occurring is:
A)remote.
B)possible.
C)probable.
D)certain.

Question

Quizplus · Accepted Answer

The disclosure of a contingent liability only in the footnotes indicates that the possibility of an actual obligation arising is possible, but not probable or certain. The liability depends on future events, such as the outcome of a lawsuit, and there is a chance that it may not materialize. Therefore, it is classified as contingent and disclosed in the footnotes as a footnote disclosure.

The Disclosure of a Contingent Liability Only in the Footnotes