Ques 1: Contingent asset usually arises from unplanned or unexpec ted events that give rise to
(a) The possibility of an inflow of economic benefits to the business entity.
(b) The possibility of an outflow of economic benefits to the business entity.
(c) Either (a) or (b).
Ques 2: If an inflow of economic benefits is probable then a contingent asset is disclosed
(a) In the financial statements.
(b) In the report of the approving authority (Board of Directors in the case of a company, and the corresponding approving authority in the case of any other enterprise).
(c) In the cash flow statement.
Ques 3: In the case of ___________, either outflow of resources to settle the obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sucient reliability.
(c) Contingent liabilities
Ques 4: Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as ________.
(c) Contingent liability.
Ques 5: In the financial statements, contingent liability is
(b) Not recognised.