A Contingent Liability Should Be Recorded When

Multiple Choice

A contingent liability should be recorded when

A) any lawsuit is actually filed against a company.
B) it is certain that funds are available to pay the amount of the claim.
C) it is probable that a liability has been incurred even though the amount of the loss cannot be reasonably estimated.
D) the amount of the loss can be reasonably estimated and it is probable prior to issuance of financial statements that a liability has been incurred.