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What is meant by contingent liablity? |
| Answer» A possible future liability, which depends on the happenings of certain uncertain event, is called contingent liability. These liabilities are not shown in the total of liability side, but are shown as a footnote to the balance sheet.The following are some examples of contingent liabilities: -\t\tUncalled liabilities on partly paid shares\t\t\tLiabilities under Guarantee\t\t\tArrears of dividends on cumulative preference shares\t\t\tClaim against the company now acknowledged as debts\t\t\tLiabilities on Bills Receivable discounted but not matured.\t | |