When is a contingent liability recorded? When the amount car be reasonably estimated. When the future events are probable to occur and the amount can be reasonably estimated. When the future events are probable to occur. When the future events will possibly occur and the amount can be reasonably estimated. Which of the following is not considered a part of the definition of a liability? Unavoidable obligation. Transaction or other event creating the liability has already occurred. Present obligation that entails settlement by probable future transfer or use of cash, goods or services. Liquidation is reasonably expected to require use of existing resources classified as current assets or create other current liabilities. What is a contingency? At existing situation where certainty exists as to a gain or loss that will be resolved when one or more future events occur or fail to occur. An existing situation where uncertainty exists as to possible loss that will be resolved when one or more future events occur. An existing situation where uncertainty exists as to possible gain or loss that will not be resolved in the foreseeable future. An existing situation where uncertainty exists as to possible gain or loss that will be resolved when one or more future events occur or fail to occur.
When is a contingent liability recorded? When the amount car be reasonably estimated. When the future events are probable to occur and the amount can be reasonably estimated. When the future events are probable to occur. When the future events will possibly occur and the amount can be reasonably estimated. Which of the following is not considered a part of the definition of a liability? Unavoidable obligation. Transaction or other event creating the liability has already occurred. Present obligation that entails settlement by probable future transfer or use of cash, goods or services. Liquidation is reasonably expected to require use of existing resources classified as current assets or create other current liabilities. What is a contingency? At existing situation where certainty exists as to a gain or loss that will be resolved when one or more future events occur or fail to occur. An existing situation where uncertainty exists as to possible loss that will be resolved when one or more future events occur. An existing situation where uncertainty exists as to possible gain or loss that will not be resolved in the foreseeable future. An existing situation where uncertainty exists as to possible gain or loss that will be resolved when one or more future events occur or fail to occur.
Answer
3
Contingent liability recorded when the future events are
probable to occur and amount can be reasonably estimated. If any
one of their two conditions does not fulfilled then contingent
liability does not require to be recorded.
Hence Option b is right answer.
4
Liability is unavoidable obligation, any event or transaction
which creates liability, present obligation which will settle in
future out flow of resources. Hence option d is the only option
which does not come under the definition of liability.
5
Contingency is future event which cannot be predicted with
certainty. It will be resolved in future due to happening and not
happening of future events, Contingency can be for profit or can be
for loss. Hence option d is right answer because it describes all
conditions.
