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      Question

      Which of these is considered a contingent

      liability?
      A Unpaid dividend declared Correct Answer Incorrect Answer
      B Pending lawsuit where outflow is probable and amount is estimable Correct Answer Incorrect Answer
      C Guarantee given by the company where outflow is possible but not probable Correct Answer Incorrect Answer
      D Long-term loans payable next year Correct Answer Incorrect Answer
      E Accrued expenses Correct Answer Incorrect Answer

      Solution

      Contingent liabilities disclosed when possible (but not probable) or amount not reliably measurable.

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