28. Which of the following statements best describes a contingent lability? O A

Question

28. Which of the following statements best describes a contingent lability? O A contingent liability is a potential liablity that will be incurred if a natural The amount of a contingent liablity is known and will definitely have to be O A contingent liability is a potential liability that has arisen because of a past disaster happens paid in the future. transaction or event, but its ultimate outcome will not be known until a future event occurs or fails to occur O A contingent liability will only be incurred if a particular future event takes place

Explanation / Answer

Ans A contingent liability is a potential liability that has arisen because of a past transaction or event, but its ultimate outcome will not be known until a future event occures or fails to occur.

The amount of Contingent liability is unknown , but it can be estimated. It is not a definite liability, it may or may not occur.

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