Contingent Liability
Contingent Liability is the liability that may or may not arise in the future. It is not recorded on the Liabilities side of the Balance Sheet but is shown in Notes to Accounts. For example, order of the court.
Financial Statement with Adjustment with Examples-V
Through adjustments in the financial statement, we consider all the accounting items which are relevant to the current financial year, but not recorded in the books due to any reason or wrongly recorded. This helps us in getting the actual profit or loss for the year and the accurate financial position of the company. Six basic adjustments, like Use of Goods in Business, Manager’s Commission on Profit, Deferred Revenue Expenditure, Contingent Liability, Sale of Goods on Sale or Return Basis, Goods in Transit are discussed below.