Uncertainties such as natural disasters are: Select one: a. Estimated liabilities because the amounts are uncertain. b. Not contingent liabilities because they are future events not arising from past transactions or events. c. Not contingent liabilities because they are future events not arising from past transactions or events. Contingent liabilities because they are future events arising from past transactions or events. d. Disclosed because of their usefulness to financial statements. e. Reported in the same way as debt guarantees.

Question

Evelyn Clay

Business

7 June, 04:01

Uncertainties such as natural disasters are: Select one: a. Estimated liabilities because the amounts are uncertain. b. Not contingent liabilities because they are future events not arising from past transactions or events. c. Not contingent liabilities because they are future events not arising from past transactions or events. Contingent liabilities because they are future events arising from past transactions or events. d. Disclosed because of their usefulness to financial statements. e. Reported in the same way as debt guarantees.

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Simon Wade · Answer 1

d. Disclosed because of their usefulness to financial statements.

Explanation:

A liability is a present obligation (Legal or Constructive) of an Entity that arises as a result of a past event and the settlement of which will result from an out flow of cash from the entity.

One class of Liability that relate to the case is a Provision. A provision is a liability whose amount can be determined with certainty.

A liability whose amount can not be determined with certainty is known as a Contingent liability. A contingent liability is not presented in the financial statements but is only disclosed in the Financial Statements.