Which of the following statements is false?a. A contingent liability should be disclosed in the notes to the financial statements if thereis a reasonable possibility that a loss (or expense) will occur.b. All contingent liabilities should be reported as liabilities on the financial statements,even those that are unlikely to occur.c. A contingent liability is a potential obligation that depends on the future outcome of pastevents.d. A contingent liability should be accrued if the loss is probable and the amount of theloss can be reasonably estimated.

Question

Which of the following statements is false?
a. A contingent liability should be disclosed in the notes to the financial statements if there
is a reasonable possibility that a loss (or expense) will occur.
b. All contingent liabilities should be reported as liabilities on the financial statements,
even those that are unlikely to occur.
c. A contingent liability is a potential obligation that depends on the future outcome of past
events.
d. A contingent liability should be accrued if the loss is probable and the amount of the
loss can be reasonably estimated.

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