Question

_________is a liability which may or may not arise in future depending on happening of some uncertain future event.

• A. Contingent liability
• B. Bills of collection
• C. Non-banking liability
• D. Bills payable

Answer 1

Answer: (A)

Contingent liability

A contingent liability is a liability or a potential loss that may occur in the future depending on the outcome of a specific event.

Potential lawsuits, product warranties, and pending investigation are some examples of contingent liability.