Question

which of these words is associated with requiring contingent liability to be accrued?
a) Possible
b) Remote
c) Probable
d) Reasonable
e) likely

Answer 1

Answer:

Here is the answer for you

Explanation:

contingent liability is a liability that may occur depending on the outcome of an uncertain future event. A contingent liability is recorded if the contingency is likely and the amount of the liability can be reasonably estimated. The liability may be disclosed in a footnote on the financial statements unless both conditions are not met.

 First, record a contingent liability when the likelihood of a future event occurring is probable.

Second, record a contingent liability when you can reasonably estimate the amount. Warranty claims and lawsuits are examples of events that may become recordable contingent liabilities.