Define (a) a contingency and (b) a contingent liability.

Define (a) a contingency and (b) a contingent liability.



(a) A contingency is defined as an existing condition, situation, or set of circumstances involving uncertainty as to possible gain (gain contingency) or loss (loss contingency) to an enterprise that will ultimately be resolved when one or more future events occur or fail to occur.

(b) A contingent liability is a liability incurred as a result of a loss contingency.


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