Which of the following is not a contingent liability?
Correct answer: A. Debts included in Sundry Debtors which are doubtful in nature
- A. Debts included in Sundry Debtors which are doubtful in nature
- B. Uncalled liability on partly paid shares
- C. Claims against the company not acknowledged as debts
- D. Arrears of fixed cumulative dividend
Explanation
Doubtful debts are an estimated loss or provision relating to receivables, not a contingent liability. Uncalled share capital, unacknowledged claims and arrears of cumulative preference dividends may become obligations depending on future events.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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