Which of the Following Statements Best Describes a Contingent Liability

Multiple Choice

Which of the following statements best describes a contingent liability?

A) The amount of a contingent liability is known and will definitely have to be paid in the future.
B) A contingent liability is a potential liability that has arisen because of a past transaction or event,but its ultimate outcome will not be known until a future event occurs or fails to occur.
C) A contingent liability will only be incurred if a particular future event takes place.
D) A contingent liability is a potential liability that will be incurred if a natural disaster happens.