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.

---

Definitions:

UCC Section

A part of the Uniform Commercial Code, a set of laws that provide legal rules and regulations governing commercial or business dealings and transactions.

Defective Design

A flaw in the intended design of a product that makes it unsafe or unfit for its intended use.

SUV Model

A term used to describe a category of motor vehicles that combines elements of road-going passenger cars with features from off-road vehicles, like raised ground clearance or four-wheel drive.

Parking Space

A designated area or spot for parking vehicles, often marked in public and private lots or along street sides.