According to FASB,when should a company journalize a contingent liability?
A)Journalize the contingent liability,even though you will probably win the lawsuit.
B)Journalize the contingent liability only if the amount can be estimated and the probability of loss is reasonably possible.
C)Journalize the contingent liability if it is probable that the loss will occur,and the amount of the loss can be reasonably estimated.
D)Do not journalize the contingent liability under any circumstances.

Question

Quizplus · Accepted Answer

According to the Financial Accounting Standards Board (FASB), a company should journalize a contingent liability if it is probable that the loss will occur and the amount of the loss can be reasonably estimated. This guideline ensures that financial statements provide a complete and accurate picture of a company's financial condition.

According to FASB,when Should a Company Journalize a Contingent Liability