Respuesta :
A contingent liability is an actual obligation arising from a past event. This statement is: False its not actual.
What is Contingent Liability ?
A contingent liability is defined as a liability which may arise depending on the outcome of a specific event. It is a possible obligation which may or may not arise depending on how a future event unfolds. A contingent liability is recorded when it can be estimated, else it should be disclosed.
The Types of Contingent Liabilities are :
Probable:
Probable contingent liabilities can be reasonably estimated (and must be reflected within financial statements.
Possible:
Possible contingent liabilities are as likely to occur as not (and need only be disclosed in the financial statement footnotes.
Remote:
Remote contingent liabilities are extremely unlikely to occur (and do not need to be included in financial statements at all.
Examples of Contingent Liability are:
Pending lawsuits :
Pending lawsuits are considered contingent because the outcome is unknown.
Warranties :
A warranty is considered contingent because the number of products that will be returned under a warranty is unknown.
Hence, The given Statement is FALSE.
Learn more about Contingent Liabilities on:
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