A company can have a liability even if the amount of the obligation is unknown.

Name: A company can have a liability even if the amount of the obligation is unknown.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A company may have a liability that is contingent, meaning the amount or timing of the obligation is uncertain. Examples of contingent liabilities include pending legal claims or product warranties. Even though the exact amount may not be known, companies are required to disclose these potential liabilities in their financial statements.

A Company Can Have a Liability Even If the Amount