Which of the following is a required condition for a contingent liability to exist?
A)There is a potential liability to an employee of the client.
B)The amount of the future payment is known.
C)The liability resulted from known events.
D)The outcome has been resolved by a current event.

Question

Quizplus · Accepted Answer

A contingent liability must be the result of a possible obligation stemming from past events. It is not yet a present obligation because the outcome is uncertain. The amount of future payment and any potential liabilities to employees are not required conditions for a contingent liability. The outcome must be uncertain, and not yet resolved by a current event.

Which of the Following Is a Required Condition for a Contingent