Contingent liabilities Required a. Give an example of a contingent liability that is probable and reasonably estimable.

Question:

Required

a. Give an example of a contingent liability that is probable and reasonably estimable. How would this type of liability be shown in the accounting records?

b. Give an example of a contingent liability that is reasonably possible or probable but not reasonably estimable. How would this type of liability be shown in the accounting records?

c. Give an example of a contingent liability that is remote. How is this type of liability shown in the accounting records?

Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a...