Accounting for contingent liabilities covers three possibilities: (1) The future event is probable and the amount cannot be reasonably estimated; (2) The future event is remote or unlikely to recur; (3) The likelihood of the liability to occur is impossible.

Question

Quizplus · Accepted Answer

Accounting for contingent liabilities covers three possibilities: (1) The future event is probable and the amount can be reasonably estimated; (2) The future event is reasonably possible but not probable; (3) The future event is remote. The statement incorrectly describes the first and third possibilities.

Accounting for Contingent Liabilities Covers Three Possibilities: (1) the Future