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.

Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occurGroup of answer choicesTrueFalse

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: