Which of the Following Statements Best Describes a Contingent Liability

Multiple Choice

Which of the following statements best describes a contingent liability? A contingent liability is a:

A) liability,the amount of which is known and which definitely must be paid.
B) 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) liability that will only be incurred if a particular future event takes place.
D) potential liability that will be incurred if a natural disaster happens.