When a Company Encounters a Contingent Liability That Is Remote

Multiple Choice

When a company encounters a contingent liability that is remote in likelihood, the company should:

A) include a description in the footnotes to the financial statements.
B) record the amount of the liability times the probability of its occurrence.
C) record the amount of the liability as a long-term liability on the balance sheet.
D) omit the information about the contingent liability from its financial statements and footnotes.