Question

The cancellation of contingent
liability is
for company​

Answer 1

Explanation:

A contingent liability is a liability or a potential loss that may occur in the future depending on the outcome of a specific event. Potential lawsuits, product warranties, and pending investigation are some examples of contingent liability.

Answer 2

The cancellation of contingent liability is a profit for the company.

• Every company gives a certain sum of money as an emergency fund which they can use at times of emergency or during any unforeseen circumstances.

• Contingent liabilities and expected liability which may or may not arise in the future the company keeps aside a certain amount for these kinds of liability such as product warranties for various goods. The money kept aside can be added to the profit if it is canceled.