Why are contingent liabilities considered unique and different from all other liabilities?
A)Whether or not a company has an obligation depends on the result of a future event.
B)Whether or not a company has an obligation depends on the result of a past event.
C)The company knows the amount of the obligation.
D)Both B and C are unique to contingent liabilities.

Question

Quizplus · Accepted Answer

Contingent liabilities are considered unique and different from all other liabilities because whether or not a company has an obligation depends on the result of a future event. Other liabilities are generally certain and known, such as accounts payable or long-term debt. However, contingent liabilities may or may not result in a future obligation depending on the outcome of an uncertain event or circumstance.

Why Are Contingent Liabilities Considered Unique and Different from All