A certain contingent liability was evaluated at year-end,and considered to have a reasonable possibility of becoming an actual liability.If the accountant decided NOT to report it on the balance sheet or in the notes to the financial statement,this could be considered unethical behavior.

Question

Quizplus · Accepted Answer

According to Generally Accepted Accounting Principles (GAAP), contingent liabilities with a reasonable possibility of becoming an actual liability should be disclosed in the notes to the financial statements. Failing to disclose such information could be considered unethical behavior.

A Certain Contingent Liability Was Evaluated at Year-End,and Considered to Have