Question

Claim against the company not yet acknowledged as debt, it is a ________.

Options

• Current Liability

• Contingent Liability

• Reserve and Surplus

• Provisions

Answer 1

Claim against the company not yet acknowledged as debt, it is a contingent liability.

Explanation:

After completing the balance sheet, a claim against the company that has not been accepted as a debt is shown as a contingent liability. It appears in the balance sheet as a footnote. Contingent liabilities are those that may or may not exist in the future as a result of future events. It could be a liability or not, depending on what happens in the future.