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      Question

      Contingent Liabilities are shown in

      the:
      A Liability side of the Balance Sheet. Correct Answer Incorrect Answer
      B Asset side of the Balance Sheet. Correct Answer Incorrect Answer
      C Notes to Accounts. Correct Answer Incorrect Answer
      D Profit & Loss Account. Correct Answer Incorrect Answer
      E Trading Account. Correct Answer Incorrect Answer

      Solution

      As per the principle of full disclosure, potential liabilities that depend on a future event (like a pending lawsuit) are disclosed in notes, not the main balance sheet.

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