Only contingencies that are probable and can be estimated are recorded as a liability and an accrued expense.

Name: Only contingencies that are probable and can be estimated are recorded as a liability and an accrued expense.
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Question

Quizplus · Accepted Answer

This statement is true. According to accounting principles, a liability and an accrued expense are recorded only for contingencies that are both probable and estimable. Contingencies that are remote or cannot be estimated are not recorded as liabilities.

Only Contingencies That Are Probable and Can Be Estimated Are