Question

A contingent liability is:Multiple ChoiceAlways of a specific amount.An obligation arising from the purchase of goods or services on credit.An obligation arising from a future event.A potential obligation that depends on a future event arising from a past transaction or event.An obligation not requiring future payment.

Answer 1

Answer:

A potential obligation that depends on a future event arising from a past transaction or event

Explanation:

A contingent liability is a potential obligation that depends on a future event arising from a past transaction or event.

Contingent liability are usually recorded in the financial statements if :

A. The contingency is likely to occur

B. The amount can be estimated.

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