If a Potential Loss on a Contingent Liability Is Unlikely

Multiple Choice

If a potential loss on a contingent liability is unlikely and the event will not likely have a significant adverse financial effect,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.