Which of the Following Statements Best Describes a Contingent Liability

question 35

Multiple Choice

Which of the following statements best describes a contingent liability? A contingent liability is a:

• A)liability,the amount of which is known and which definitely must be paid.
• B)potential liability that has arisen because of a past transaction or event,but its ultimate outcome will not be known until a future event occurs or fails to occur.
• C)liability that will only be incurred if a particular future event takes place.
• D)potential liability that will be incurred if a natural disaster happens.

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Definitions:

Chi-square Technique

A statistical method used to assess the differences between observed frequencies and expected frequencies in one or more categories.

Qualitative Variables

Variables that describe or categorize attributes or characteristics of a sample or population, without implying any order or numerical value for comparison.

Goodness-of-fit-test

A statistical test used to determine how well sample data fit a distribution from a population with a normal distribution.

Contingency Table

A table used in statistics to show the frequency distribution of variables, helping in analyzing the relationship between them.