Question

Contingent Liabilities should be reflected by a business

Q: Answer-Contingent Liabilities should be reflected by a business organization as the possible future obligat...

Contingent Liabilities are not the present liabilities therefore they should not be disclosed as a Balance Sheet Item which shows the Assets and Liabilities as on date. These liabilities become proper liabilities only on the happening of an uncertain future event therefore comes under Notes to accounts.

organization as the possible future obligations. In which of the following statements are Contingent liabilities shown?

A Trial Balance

B Balance Sheet

C Profit and Loss Account

D Cash Flow Statement

E Notes to Accounts

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Contingent Liabilities should be reflected by a business

Solution