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What is a contingent liability?

  1. A A possible obligation depending on an uncertain future event, disclosed but not recognised
  2. B A confirmed debt due within a year
  3. C A provision recorded in the accounts
  4. D An asset held for sale
Answer

A possible obligation depending on an uncertain future event, disclosed but not recognised

A provision is recognised when an outflow is probable and can be reliably estimated. A contingent liability is only disclosed.

All CA MCQs

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