Revision Notes for CPT Unit: Contingent Assets and Contingent Liabilities Chapter: Accounting Proccess Subject: Fundamentals of Accounting

1. CPTSuccess Revision Notes – Fundamentals of Accounting Chapter 2. Accounting Process Unit 7: Contingent Assets and Contingent Liabilities

3. As per the concept of prudence and present AS, an enterprise should not recognize a Contingent Asset.

4. A contingent liability is a possible obligation arising from past events and may arise in future depending on occurrence or non-occurrence of one or more uncertain future events. © Revision Notes - Fundamentals of Accounting CPTSuccess www.cptsuccess.com

6. Contingent liabilities are shown as foot-note in the balance sheet

7. Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation, is termed as “Provision”. In these cases, the liability is certain but the amount has to be estimated© Revision Notes - Fundamentals of Accounting CPTSuccess www.cptsuccess.com

8. CPTSuccess