Question

Accounting for contingent liabilities covers three possibilities: (1) The future event is probable and the amount cannot be reasonably estimated; (2) The future event is remote or unlikely to recur; (3) The likelihood of the liability to occur is impossible.a. Trueb. False

Answer 1

False

Step-by-step explanation:

A contingent liability is a liability that is yet to occur but likely to occur in the future as a result of a past event. E.g. the outcome of a pending lawsuit

Contingent liabilities are accounted for when:

1. The future event is likely to occur or the future event is probable.

2. The amount can be reasonably estimated

I hope my answer helps you.