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

Question

Quizplus · Accepted Answer

A contingent liability is a potential obligation that depends on a future event arising out of a past transaction or event. It is not always of a specific amount, is not an obligation not requiring future payment, and is not necessarily arising from the purchase of goods or services on credit. It is an obligation arising from a future event that may or may not occur.

A Contingent Liability