The Key Characteristic of Contingent Liabilities Is

question 16

Multiple Choice

The key characteristic of contingent liabilities is:

• A)A legal dispute must exist at balance date
• B)The liability does not exist beyond a reasonable doubt
• C)The liability will be confirmed only by the occurrence or non-occurrence of a future event not completely within the control of an entity
• D)The timing of the future sacrifice of economic benefits is uncertain

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Definitions:

Statutory Holdback

A legal requirement to withhold a certain percentage of the contract price on a construction project to ensure all subcontractors are paid.

Lien Claimant

Describes a person or entity that has the right to keep possession of property belonging to another person until a debt owed by that person is discharged.

Loan Agreement

A legally binding contract between a borrower and a lender detailing the terms and conditions under which the loan is provided.

Guarantees

Written assurances that certain conditions will be fulfilled, often relating to the quality, durability, or performance of a product or service.