An obligation dependent upon an event that has not yet occurred is an example of a(n):
A)contingent liability.
B)estimated liability.
C)known liability.
D)accrued liability.

Question

Quizplus · Accepted Answer

A contingent liability is an obligation that may or may not occur depending on the outcome of uncertain future events. Therefore, an obligation dependent upon an event that has not yet occurred is an example of a contingent liability. Estimated and known liabilities refer to obligations that have already been incurred and whose amounts can be reasonably estimated or determined, while an accrued liability is an obligation that has been incurred but not yet paid.

An Obligation Dependent Upon an Event That Has Not Yet