Which one of the following would be considered a contingent liability?
A. A company owes $100,000 on inventories purchased on credit
B. A company estimates that it will probably have to pay $1,200,000 to the Department of Environment Protection for a chemical spill
C. A company has $845,000 worth of bonds outstanding
D. The company has access to a line of credit with a bank in the amount of $1,500,000
E. The company believes that it is reasonably possible it will lose a lawsuit but is unable to determine the possible damages
Ans: B. A company estimates that it will probably have to pay $1,200,000 to the Department of Environment Protection for a chemical spill
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