A Contingent Liability

question 61

Multiple Choice

A contingent liability:

• A) Is always of a specific amount.
• B) Is a potential obligation that depends on a future event arising from a past transaction or event.
• C) Is an obligation not requiring future payment.
• D) Is an obligation arising from the purchase of goods or services on credit.
• E) Is an obligation arising from a future event.

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Definitions:

Commitment

The state of being dedicated or loyal to a cause, activity, job, or relationship, typically demonstrated through continuing involvement and effort.

Retirement Income

Money that an individual receives after retiring from work, which may come from pensions, savings, investments, or government programs.

General Body Meetings

Gatherings where members of an organization come together to discuss issues, make decisions, and update everyone on progress or plans.

Incentive Plans

Programs designed to motivate and reward employees for exceeding performance goals or benchmarks.