If a Potential Loss on a Contingent Liability Is Likely

Multiple Choice

If a potential loss on a contingent liability is likely and the amount of the loss can be reasonably estimated,the liability should be

A) accrued and indicated in the body of the financial statements.
B) disclosed in footnotes but not accrued.
C) neither accrued nor disclosed in footnotes.
D) disclosed in the auditor's report but not disclosed on the financial statements.