Question

Which of the following is not shown in the balance sheet?

• A. Current liability
• B. Fixed liability
• C. Contingent liability
• D. Long term liability

Answer 1

Answer:

C. Contingent liability

A Balance Sheet shows actual assets and liabilities of a business at a particular date. Current Liabilities, Fixed Liabilities, and Long-term Liabilities are actual obligations and are shown on the balance sheet. Contingent Liability is a potential or possible obligation that may arise depending on the outcome of a future event (e.g., a lawsuit). Since it is not certain, it is disclosed in the notes to accounts, not in the main balance sheet.