Which of the following is an example of a contingent liability?
A)A liability for notes payable with interest included in the face amount
B)The liability for future warranty repairs on computers sold during the current period
C)A lawsuit being threatened but not yet filed against a restaurant chain for improper preparation of food
D)A corporate long-term employment contract with the chief executive officer

Question

Quizplus · Accepted Answer

A contingent liability is a potential liability that may or may not occur depending on a future event. The liability for future warranty repairs is an example of a contingent liability as it depends on the occurrence of future defects in the products sold during the current period.

Which of the Following Is an Example of a Contingent