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:

Income Statement

A financial report that shows a company’s revenues and expenses over a period of time, leading to net profit or loss.

Missing Amounts

Figures or data that are not included in financial statements or records, requiring adjustments or calculations to determine.

Income Statement

A financial statement showing a company's revenue, expenses, and profit or loss over a specific period, often quarterly or annually.

Inventory Unit Costs

The costs associated with obtaining or producing a single unit of inventory, encompassing material, labor, and overhead.