Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Contingent Liabilities

Financial Accounting

9. Current Liabilities

Contingent Liabilities

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Multiple Choice

The flipside of a contingent gain is a contingent:

asset

liability

expense

revenue

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Verified step by step guidance

Understand the concept of a contingent gain: A contingent gain is a potential gain that depends on the occurrence of a future event. It is not recognized in financial statements until it becomes certain.

Learn the flipside of a contingent gain: The flipside refers to the counterpart or opposite concept. In this case, it is a contingent liability, which is a potential obligation that depends on the occurrence of a future event.

Review the definition of a contingent liability: A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of uncertain future events not wholly within the control of the entity.

Compare contingent gain and contingent liability: While a contingent gain represents a potential benefit, a contingent liability represents a potential cost or obligation. Both are disclosed in the notes to financial statements but are not recognized until they become certain.

Conclude that the correct answer is 'liability' because it represents the flipside of a contingent gain, as it is the potential obligation counterpart.