'A Potential Future Obligation to an Outside Party for an Unknown

question 69

Multiple Choice

'A potential future obligation to an outside party for an unknown amount resulting from activities that have already taken place contingent on a future event' is the definition of:

• A) a long- term liability.
• B) contingent liability
• C) an accrued liability.
• D) a current liability.

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Definitions:

Risk

The potential for losing something of value or for an undesirable outcome, often assessed in decisions involving finance, safety, and health.

Known Factors

Elements or conditions that are clearly understood or recognized in a given context or analysis.

Insurance Contract

A legal agreement between an insurance policyholder and the insurer, detailing the terms and conditions under which the insurer agrees to compensate the insured for specific losses or damages.

Policy

A course or principle of action adopted or proposed by an organization or individual, guiding decisions and achieving rational outcomes.