An Example of a Contingent Liability May Be a Lawsuit

question 28

True/False

An example of a contingent liability may be a lawsuit.

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Definitions:

Reclassifying Costs

The process of moving costs from one category to another in accounting records.

Period Costs

Expenses that are not directly tied to production and are expensed in the period in which they occur, such as selling and administrative expenses.

Product Costs

Expenses directly associated with the creation of a product, including materials, labor, and factory overhead.

Quarterly Financial Reports

Periodic statements issued by a company every three months to detail its financial performance.