In addition to contingent liabilities,a company may have another type of potential liability in the form of
A)under funded pension plans
B)future commitments made to lease holders,suppliers of raw materials,or consolidated or non-consolidated subsidiaries
C)over funded pension plans
D)unfunded health care plans

Question

Quizplus · Accepted Answer

Future commitments made to lease holders, suppliers of raw materials, or consolidated or non-consolidated subsidiaries are known as long-term commitments. These commitments may cause potential liabilities for the company in the future if it is unable to fulfill its obligations. Underfunded pension plans, unfunded health care plans, and overfunded pension plans are all examples of contingent liabilities.

In Addition to Contingent Liabilities,a Company May Have Another Type