Q324
When obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called
A.
Contingent liability
AnswerB.
Provision
C.
Secured loan
D.
None of the above
Answer: Option A
Solution
Answer: Option A
Solution:
When obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called Contingent liability. Contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event.