A Contingent Liability Is a Potential Obligation That Is Based

question 136

True/False

A contingent liability is a potential obligation that is based on uncertainties surrounding future technologies and natural disasters.

---

Definitions:

Double Taxation

The imposition of taxes on the same income, asset, or financial transaction at two different levels, such as corporate earnings and shareholder dividends.

Proprietorship

A business owned and operated by an individual, where the owner is personally responsible for the business's debts.

Limited Liability

Limited liability is a legal structure that restricts investors' or owners' personal responsibility for a company’s debts and losses to the extent of their investment.

Potential Sales

The estimated total sales revenue that a company could theoretically achieve in a market under ideal conditions.