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Financial Statements of Sole Proprietorship — Account STD 11 Commerce — Question

CBSE BoardEnglish MediumSTD 11 CommerceAccountFinancial Statements of Sole Proprietorship1 Mark
Question
What do you understand by Contingent Liability?
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Answer

Contingent Liability is that liability which becomes payable on the happening of an event.
For example, a suit for claim is filed against the business which the business does not acknowledge. It is a contingent liability and will become payable if the court decides against it.

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