Contingent liabilities are reported on the income statement.

Name: Contingent liabilities are reported on the income statement.
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Question

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Contingent liabilities are not reported on the income statement but are disclosed in the notes to the financial statements. They are potential liabilities that might or might not occur depending on the outcome of future events. Examples include lawsuits, warranties, and environmental cleanup costs.

Contingent Liabilities Are Reported on the Income Statement