If a company determines that the likelihood of a future obligation arising from a contingent liability is possible, the company must record a liability on its balance sheet.

Name: If a company determines that the likelihood of a future obligation arising from a contingent liability is possible, the company must record a liability on its balance sheet.
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Question

Quizplus · Accepted Answer

A contingent liability that is only possible is disclosed in the notes to the financial statements, not recorded on the balance sheet.

If a Company Determines That the Likelihood of a Future