what are contingent liabilities? list three examples of contingent liabilities. When should contingent liabilities be recorded...

Question

Question

what are contingent liabilities? list three examples of contingent liabilities. When should contingent liabilities be recorded in accounts?

Answer 1

Answer #1

contingent liabilities are those liabilities whose occurrence depends upon future uncertain event.
examples: pending lawsuit, product warranty, guarantee given by one party to another
contingent liabilities should be recorded when (a) the contingent even is likely to happen and (b) the amount of liability can be estimated with reasonable accuracy.

Answer 2

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