Final answer:
The correct term for recording a contingent liability is 'probable'. This is based on GAAP, which mandates the recording of a liability when it is 'probable' and the amount can be reasonably estimated.
Step-by-step explanation:
The term associated with recording a contingent liability is 'probable'. According to generally accepted accounting principles (GAAP), a contingent liability should be recorded in the financial statements if it is probable that the liability has been incurred as of the date of the financial statements and the amount of the loss can be reasonably estimated. The options 'possible' and 'remote' do not require the recording of a liability, whereas 'likely' is not as precise a term as 'probable' under GAAP.