When a contingent liability exists, the likelihood for loss can be evaluated asprobable, reasonably possible, or remote. A remote loss isa loss where the chance of occurrence is slighta loss that is likely to occura loss where the chance of occurrence is moderatefalls between the chance of occurrence is slight and a loss is likely to occur

A contingent liability is the possible obligation which will only be confirmed by future event which…

Answered: When a contingent liability exists, the…

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 8MC: Which of the following best describes a contingent liability that is likely to occur but cannot be...

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Similar questions

Which of the following best describes a contingent liability that is unlikely to occur? A. remote B. probable and estimable C. reasonably possible D. probable and inestimable
When is a contingent liability is reported? Select one: when the likelihood of the loss is reasonably possible and a range of outcomes can be estimated when the future events will possibly occur, and the amount of the loss is material when the amount of the loss can be reasonably estimated when the likelihood of the loss is probable and the amount of the loss can be reasonably estimated
The accrual of a contingent liability and the related loss should be recorded when the a. Loss resulting from a future event may be material in relation to income. b. Future event that gives rise to the liability is unusual in nature and nonrecurring. c. Amount of the loss resulting from the event is reasonably estimated and the occurrence of the loss is probable. d. Event that gives rise to the liability is unusual and its occurrence is probable.
Which of the following best describes a contingent liability that is unlikely to occur?A. remoteB. probable and estimableC. reasonably possibleD. probable and inestimable
If a contingent liability is probable but estimable only within a range, what amount, if any, should the firm report?
A contingent liability O always exists as a liability but its amount and due date are indeterminable. O is accrued even though not probable. O is always the result of a loss contingency. O is not reported as a liability if not probable.
1. Under IFRS, which of the following is used to measure a liability, if a range of estimates ispredicted and no amount in the range is more likely than any other amount in the range?a. Minimum of the rangeb. Maximum of the rangec. Mid-point of the ranged. Average of the range
A contingent liability should be recorded in the financial statements when the: Select one: a. Contingent event is probable and the amount can be reasonably estimated. b. Contingent event is probable regardless of whether the amount can be reasonably estimated c. Contingent event is reasonably possible or probable regardless of whether the amount can be reasonably estimated d. Contingent event is reasonably possible and the amount can be reasonably estimated
The present obligation is not a contingent liability but shall be recognized as a provision when *a. Amount is reasonably estimable and event occurs infrequentlyb. Amount is reasonably estimable and occurrence of event is probablec. Event is unusual in nature and occurrence of event is probabled. Event is unusual in nature and event occurrs infrequently
A provision is an existing liability of uncertain timing and uncertain amount True False
When recognizing a contingent liability, if the future event is probable (likely) and the amount can be reasonably estimated, what are we required to do? A.Group of answer choices B.Do not record or disclose C.Record the liability D. Disclose in notes on financial statements
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. thanks for help appareciated it rajtir h

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