If a Potential Loss on a Contingent Liability Is Probable

Multiple Choice

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

A) neither reported nor disclosed in footnotes.
B) disclosed in the auditor's report but not disclosed on the financial statements.
C) disclosed in footnotes but not accrued.
D) included in the financial statements as an actual liability.