p 414-420] Most of the following statements are true regarding \"contingent\" li

Question

p 414-420] Most of the following statements are true regarding "contingent" liabilities. Which statement is FALSE with regard to "contingent" liabilities? O Contingent liabities are classified as probable, reasonabley possible, or remote O They are potential obligations that depend on whether a future event occurs o There is a past transaction or event that gives rise to a potential future obligation (called contingency or contingent liability) A contingent liability is the same as a "known" liability

Explanation / Answer

Contingent liabilities depend on the outcome of an uncertain future event. The contingency must be probable and the amount reasonably estimated. However, known liabilities are those that the company has little uncertainty about. This choice is false.

The FICA stands for Federal Insurance Contributions Act. The money is deducted from employee paychecks to pay older Americans for Social Security and Medicare. This is the correct choice. This question has been repeated again.

Specifically, the employee deductions are used to pay Social Security retirement and Medicare specifically hospital insurance benefits. FICA is a compulsory payroll deduction.

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