Examples of Contingent Liabilities Include

question 52

Multiple Choice

Examples of contingent liabilities include:

• A) Future payments arising under employee entitlements for long service leave.
• B) Past tax deductions claimed that are under review by the Australian Taxation Office, but which the entity intends to dispute if disallowed.
• C) Out of court settlements in the case of liability for damage to health due to products manufactured by the entity.
• D) Past tax deductions claimed that are under review by the Australian Taxation Office, but which the entity intends to dispute if disallowed and out of court settlements in the case of liability for damage to health due to products manufactured by the entity
• E) All of the given answers.

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Definitions:

Past-due Account

An account that has not been paid by the due date, indicating overdue payments.

Receivable

Amounts of money owed to a company by customers or clients for goods or services delivered but not yet paid for.

Average Collection Period

The average collection period is the average number of days it takes for a business to receive payments owed by its customers for sales made on credit.