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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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