A contingent liability:
A)is always a specific amount.
B)is an obligation arising from the purchase of goods or services on credit.
C)is an obligation not requiring a future payment.
D)is a potential obligation that depends on a future event.

Question

Quizplus · Accepted Answer

A contingent liability is a potential obligation that depends on a future event. It may or may not become an actual liability depending on the outcome of the event. It is not always a specific amount and may require a future payment. It is also not an obligation arising from the purchase of goods or services on credit or an obligation not requiring a future payment.

A Contingent Liability