Asked by Elijah Filsinger on Jul 09, 2024
Verified
A contingent liability cannot be disclosed in a note to the financial statements unless it can be estimated.
Contingent Liability
A potential financial obligation that may occur in the future, depending on the outcome of a specific event.
Financial Statements
Reports that provide an overview of a company's financial condition, including the balance sheet, income statement, and cash flow statement.
- Understand the principles of accounting for contingent liabilities and how they are reported.
Verified Answer
MB
mitchell berkeleyJul 11, 2024
Final Answer :
False
Explanation :
A contingent liability can be disclosed in the notes to the financial statements even if it cannot be estimated, to inform users about its existence and potential impact.
Learning Objectives
- Understand the principles of accounting for contingent liabilities and how they are reported.