Which of the Following Is True of a Contingent Liability

question 146

Multiple Choice

Which of the following is true of a contingent liability?

• A)It is a potential liability that depends on a future event.
• B)It is an actual liability that is difficult to estimate.
• C)It is an actual liability that depends on a past event.
• D)It is a liability resulting from a lawsuit settled in court.

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Definitions:

Projected Sales

The estimated amount of sales revenue a company expects to earn in a future period, based on market analysis and sales trends.