Which of the Following Is the Most Likely Candidate for a Contingent

question 50

Multiple Choice

Which of the following is the most likely candidate for a contingent liability that must be accrued?

• A) Potential liability for a lawsuit in which the firm is a defendant
• B) Property tax payable
• C) Potential liability on a product that is still in the planning stages (no items have been sold)
• D) Warranty liability

---

Definitions:

Reconciliation

The process of ensuring that two sets of records (usually the balances of two accounts) are in agreement.

Ordering Merchandise

The process of acquiring goods or inventory for sale or business use through purchase or request.

Receiving Goods

The process of accepting delivery of goods from suppliers, often involving inspection and verification of order accuracy.

Potential for Errors

The likelihood or risk that inaccuracies or mistakes may occur within a process or set of data.