Question

Which of the following is not true of contingent liabilities?

• A. The result from a past transaction or promise
• B. lawsuits and loan guarantees are an example
• C. They occur in the present
• D. They result in some other event that takes place

Answer 1

The correct option is C

They occur in the present

Answer (C): They occur in the present

Explanation: A contingent liability is a liability or responsibility that might happen contingent upon the result of a dubious future occasion. An unforeseen obligation is recorded if the possibility is logical and the measure of the risk can be sensibly assessed.

Also see:

• Contingent Liabilities
• Commerce MCQs