Three GAAP-specified categories of contingent liabilities exist: probable, possible and remote. In general probable contingencies are more than likely to occur and can be reasonably appraised. Possible contingencies are less than likely of being realized, nevertheless they are not necessarily considered unlikely as well. Remote contingencies are not likely to occur.

Respond to the following in a minimum of 175 words:

• Discuss the two main distinctions between assets on the balance sheet.
• Discuss reporting requirements for contingencies.
• Explain two examples of contingent liabilities