If a company is located in an area where floods or earthquakes are deemed to be possible,the company should record a contingent liability.

Name: If a company is located in an area where floods or earthquakes are deemed to be possible,the company should record a contingent liability.
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Question

Quizplus · Accepted Answer

A contingent liability is recorded only if the event is probable and the amount can be reasonably estimated. Simply being located in an area prone to floods or earthquakes does not meet these criteria.

If a Company Is Located in an Area Where Floods