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Questions
What are contingent liabilities?
What is contingent liability?
Short Answer
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Solution
- A contingent liability refers to a potential obligation based on a future event. A contingent obligation refers to an unclear situation that will be settled by a future event.
- For example, the liability on bills discounted with a bank would become payable only when the debtors on whom the bills are drawn do not honor the bills on their due dates.
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