When the occurrence of a liability is dependent on the outcome of some future event, the liability is referred to as an):
A)contingent liability.
B)commitment.
C)accrued liability.
D)accounts payable.

Question

Quizplus · Accepted Answer

A liability that is dependent on a future event is classified as a contingent liability. This means that it may or may not become an actual liability, depending on the outcome of the event. Examples of contingent liabilities include pending lawsuits and warranties on products.

When the Occurrence of a Liability Is Dependent on the Outcome