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

An example of a liability would be:Group of answer choicesWages payableInventoryCapitalAccounts receivable

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.

Liabilities which do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote should: Reading required            Learning objective 9.4 on page 256.Group of answer choicesnot be recognised/disclosed in the financial statement at all.be recognised as an accrual.be recognised as a provision.be disclosed as a contingent liability.

A liability can be paid with another form of liabilityGroup of answer choicesTrueFalse