Which Statement About Contingent Liabilities Is Correct

question 7

Multiple Choice

Which statement about contingent liabilities is correct?

• A)It is a present obligation that will probably result in the economic outflow of resources.
• B)It involves uncertainty about either the timing of payment or the amount of payment.
• C)It is an obligation that arises from past transactions and events and can be reliably measured.
• D)It is a present obligation that arises from past events but it cannot be reliably measured.

---

Definitions:

Price Ceiling

A government-imposed limit on how high a price can be charged for a product, service, or commodity.

Gallon

A unit of measurement for volume, primarily used in the United States, equal to 128 fluid ounces, or approximately 3.785 liters.

Quantity Supplied

Quantity Supplied is the amount of a good or service that producers are willing and able to offer for sale at a particular price over a given period.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level at a specific time.