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    Question

    Contingent liabilities are recorded

    in:
    A Debit side of Income statement Correct Answer Incorrect Answer
    B Credit side of Income statement Correct Answer Incorrect Answer
    C Asset side of balance sheet Correct Answer Incorrect Answer
    D Liabilities side of balance sheet Correct Answer Incorrect Answer
    E Notes to accounts Correct Answer Incorrect Answer

    Solution

    Contingent liabilities are potential liabilities that may or may not occur, depending on the outcome of a future event. These liabilities are not recorded on the balance sheet as they are not certain or definite, but they are disclosed in the notes to accounts section to provide relevant information to the stakeholders of the company.

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