Potential Liabilities That Depend on Future Events Arising Out of Past

question 30

Multiple Choice

Potential liabilities that depend on future events arising out of past events are called:

• A)long-term liabilities.
• B)estimated liabilities.
• C)contingent liabilities.
• D)current liabilities.

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Definitions:

Collection Float

The time difference between when a check is deposited into a bank account and when the amount is credited to the account, affecting the cash flow.

Collection Float

The time period between when a check is deposited into a bank account and when the amount is available for use.

Net Float

The difference between checks written and deposited in the bank not yet cleared or settled.

Ledger Balance

The total balance in a ledger account at a particular point in time, reflecting all transactions up to that moment.