Define a Contingent Liability

question 77

Essay

Define a contingent liability.Provide three common examples.Under what circumstances should a firm report a contingent liability?

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Definitions:

Sales Offer

A promotional or sales activity making a specific proposal to entice customers to buy a product or service.

Goods

Physical items that are sold or traded, typically manufactured products or raw materials.

Business Transaction

An economic event with a third party that is recorded in an organization's accounting system.

Total Assets

The complete sum of everything a company owns or controls that has economic value, shown on the balance sheet.