Potential liabilities that depend on future events arising out of past events are called:
A)actual liabilities.
B)contingent liabilities.
C)estimated liabilities.
D)long-term liabilities.

Question

Quizplus · Accepted Answer

Contingent liabilities are potential liabilities that depend on future events arising from past events. It means that the actual occurrence of a liability is uncertain, and the outcome depends on some future event. Estimated liabilities are known amounts, which require estimation, and long-term liabilities are liabilities that are expected to be paid over a year or more. Actual liabilities are liabilities that have already occurred, and the organization is liable to pay the amount.

Potential Liabilities That Depend on Future Events Arising Out of Past