According to​ FASB, when should a company journalize a contingent​ liability?     A. Do not journalize the contingent liability under any circumstances.   B. Journalize the contingent​ liability, even though you will probably win the lawsuit.   C. Journalize the contingent liability only if the amount can be estimated and the probability of loss is reasonably possible.   D. Journalize the contingent liability if it is probable that the loss will​ occur, and the amount of the loss can be reasonably estimated.

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.