Which of the Following Is True of a Contingent Liability

The amount or existence of a contingent liability depends on some future event. Which of the following statements in relation to a contingent liability is true.

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Which of the following statements in relation to a contingent liability is true.

. In order to pass the quiz you will need to be able to. Which of the following is true of a contingent liability. The contingency is about the amount.

It is booked in Profit and loss account as Reserve for Doubtful Debts RDD based on the percentage of Debtors balance. For reporting purposes contingent liabilities are sorted into three categories depending on the likelihood of their becoming actual liabilities. A present obligation that arises from past event but cannot be reliably measured is a contingent liability.

An obligation as a result of the entity creating a valid expectation that it will discharge its responsibilities is a contingent liability. Click card to see definition. Pending lawsuits and warranties are common contingent liabilities.

A contingent liability is recorded if it is reasonably possible and the amount can be reasonably estimated. It is an actual liability that depends on a past event. False True or False.

In this case that something else is the liability. It is a potential liability that depends on a future event. It is a potential liability that depends on a future event.

Contingent liabilities represent losses. Which of the following is not a contingent liability. Debts included in Sundry Debtors which are doubtful in nature.

Thus an event must. About This Quiz Worksheet. This quiz and worksheet can help you assess your knowledge of the different types of contingent liabilities.

Tap card to see definition. Debts included on debtors which are doubtful in nature has a certain level of estimation and hence it cannot be a contingent liability. A present obligation that arises from past event but cannot be reliably measured is a contingent liability a.

It is an actual liability that is difficult to estimate. Claims against the company not acknowledged as debts. A contingency implies that something must occur before something else is triggered.

Tap again to see term. In this case the contingent liability must take account of the possibility of a contingency and estimate the amount involved. Pending lawsuits are considered contingent because the outcome is unknown.

A contingent liability is a potential obligation arising from a past event. A contingent liability is recorded in the accounting records if the contingency is probable and the amount of the liability can be reasonably estimated. A contingent liability is A a potential liability that depends on a future event.

It is a liability resulting from a lawsuit settled in court. A warranty is considered contingent because the number. Click again to see term.

1 day agoThe term contingent liability is used to describe the probability of an uncertain future event resulting in an event-related liability. Uncalled liability on partly paid shares. Correct option is A A contingent liability is a potential liability that may occur depending on the outcome of an uncertain future events.

Many of the accounting standards in GAAP for current assets accounts are ____ with the international standards. A contingent liability is recorded with a journal entry only if the contingency is both probable and the amount can be estimated. Net pay is determined by applying the hourly rate of pay to the hours worked less payroll deductions.

Explanation-An consequence of an unknown potential occurrence is a contingent risk and can be a liabilityIf the contingency is probable and the sum of liability may be accurately calculated a contingent liability is documented. An obligation as a result of the entity creating a valid expectation that it will discharge its responsibilities is a contingent liability II. Which of the following is true of a contingent liability.

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