Which of the following would best describe a contingent liability?

Question

Quizplus · Accepted Answer

A contingent liability is an obligation that may or may not arise, depending on the outcome of a future event. This means there is a high degree of uncertainty about the amount or timing of the payment. Option A is describing a different type of liability called a non-monetary liability. Option B is describing a situation where the costs will be covered by insurance, which does not necessarily make it a contingent liability. Option D is describing an obligation with a low degree of uncertainty, which would not be considered a contingent liability.

Which of the Following Would Best Describe a Contingent Liability