Obligations that depend on future events and are based on past transactions are contingent liabilities.

Question

Quizplus · Accepted Answer

Contingent liabilities are defined as obligations that depend on future events and are based on past transactions. These future events may or may not occur, and the outcome of these events will ultimately determine whether the liability will be incurred or not. Examples of contingent liabilities include pending lawsuits, warranty claims, and guarantees on products or services.

Obligations That Depend on Future Events and Are Based on Past