Which of the Following Is TRUE of a Contingent Liability

question 217

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:

Agency Problems

Conflicts of interest that arise when there's a disconnect in objectives between decision-makers (agents) and the owners (principals) of an entity.

Corporate Spies

Individuals or entities that engage in espionage or intelligence gathering on competitors for commercial purposes, not for national security.

Security Analysts

Professionals who perform analysis on securities or the security market to make investment recommendations.

Financial Scandals

Events in which companies, banks, or individuals are accused of unethical or illegal financial activities, often leading to widespread public outrage and financial losses.