[Solved] Contingent liability is

Contingent liability is

a) Trade liability

b) Possible liability

c) Outstanding liability

d) None of the above

Answer: (d) 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.

More MCQ and Answers on Auditing

  1. Management audit means
  2. Systems audit implies
  3. Internal audit means
  4. Internal audit is
  5. Detection of errors and fraud in audit is  
  6. Internal auditor is appointed and removed by the  
  7. The object of internal check is to
  8. Effective internal check system reduces
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  10. The objective of internal audit is

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