Account for all the prospective losses but leave aside all the prospective profits. This is as per a. Materiality convention b. Timeliness convention c. Conservatism convention d. Prospective convention

Account for all the prospective losses but leave aside all the prospective profits. This is as per a. Materiality convention b. Timeliness convention c. Conservatism convention d. Prospective convention

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter7: Losses—deductions And Limitations

Section: Chapter Questions

Problem 8DQ

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Concept explainers

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.

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