A contingent liability is defined as a: I II III IV Possible obligation that arises from past event YES YES NO NO Possible obligation WHOSE EXISTENCE WILL BE confirmed by the occurrence of an uncertain future event YES NO YES NO Possible obligation not recognised because the outflow of economic benefits to settle the obligation is not probable. YES NO YES NO Possible obligation that is measured reliably NO NO YES YES A.IV B.III C.II D.I

A contingent liability is an existing:Multiple Choicecertain situation that might result in a future loss.uncertain situation that might result in a future gain.certain situation that might result in a future gain.uncertain situation that might result in a future loss.

A contingent liability is defined as a:

A contingent liability need only be disclosed in the financial statement notes when the likelihood of the contingency is Group of answer choicesreasonably possible.probable.remote.unlikely.

Contingent liabilities are: Reading required            Learning objective 9.3.1 on page 254-255Group of answer choicesrecognised in the financial statements unless the possibility of an outflow in the settlement is remote.not recognised in the notes to the financial statements because the possibility of an outflow in the settlement is remote.disclosed in the notes to the financial statements unless the possibility of an outflow in the settlement is remote.disclosed in the notes to the financial statements because the possibility of an outflow in the settlement is remote.

A provision is a liability for which there is greater uncertainty than for other liabilities. The uncertainty is associated with the amount or timing of the expected future sacrifice of economic benefits. Which of the following does not satisfy the definition of a liability?Group of answer choicesAllowance for doubtful debtsProvision for environmental damagesProvision for annual leaveProvision for long service leave