Question: A liability is a future obligation and a current liability is a future obligation that is due within 1 year. A contingency can result in

A liability is a future obligation and a current liability is a future obligation that is due within 1 year.

A contingency can result in a gain or loss.

  • What are the criteria to determine whether to report the contingency in financial statements?
  • Provide a detailed example of a contingent liability in a publicly traded organization.

Select 2 of your classmates' posts, and respond to them using 1 of the following prompts:

  • Do you agree with the contingency criteria discussed by your classmate?
  • How would the contingent liability mentioned by your classmate affect the financial statements?

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