A contingent liability
A)Is a liability of a specific amount
B)Is a potential obligation that depends on a future event arising out of a past transaction
C)Is an obligation not requiring immediate payment
D)Is an obligation arising from the purchase of goods or services on credit
E)None of these

Question

Quizplus · Accepted Answer

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

A Contingent Liability