When the occurrence of a liability is dependent on the outcome of some future event, the liability is referred to as a(n)
A) commitment.
B) accrued liability
C) contingent liability.
D) accounts payable.

Question

Quizplus · Accepted Answer

Contingent liabilities are potential liabilities that may occur, depending on the outcome of a future event. They are not definite obligations but are recorded in financial statements if the occurrence is probable and the amount can be reasonably estimated.

When the Occurrence of a Liability Is Dependent on the Outcome