Post Utme Achievers University 2019 Commerce Question 14

Practice objective / multiple choice question 14 from the 2019 Post Utme Achievers University Commerce examination.

Post Utme Achievers University 2019 Commerce Objective / Multiple Choice
Question 14 POST_UTME_ACHIEVERS_UNIVERSITY • 2019 • COMMERCE • objective

A company's financial statements show a net income of ₦1.2 million, but the auditor notes that the company has a contingent liability of ₦500,000. What is the correct accounting treatment for this liability?

Answer Options

Correct Answer A. Recognize the liability as a current liability and provide a footnote disclosure.
B. Recognize the liability as a non-current liability and provide a footnote disclosure.
C. Do not recognize the liability as it is not probable or estimable.
D. Recognize the liability as a current liability and provide a separate financial statement.
Correct Answer
A
Correct Option:
Recognize the liability as a current liability and provide a footnote disclosure.

About This Question

This is Post Utme Achievers University 2019 Commerce Question 14. It is one of the objective questions from the 2019 Post Utme Achievers University Commerce examination.

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