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Which of the following is not a contingent liability?
- a)Claims against enterprises not acknowledge as debts
- b)Guarantees given in respect of the third parties
- c)Liabilities in respect of bills dishonoured
- d)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.
Correct answer is option 'D'. Can you explain this answer?
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Which of the following is not a contingent liability?a)Claims against ...
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Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.
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Which of the following is not a contingent liability?a)Claims against ...
Contingent liabilities are potential obligations that may arise in the future, depending on the occurrence of certain uncertain events. They are not actual liabilities at the present moment but have the possibility of becoming liabilities in the future.
Out of the given options, the correct answer is option 'D' - Penalty imposed by Excise officer for violation of a provision of the Central Excise Act. Let's understand why this is not a contingent liability.
Explanation:
1. Claims against enterprises not acknowledged as debts:
- Contingent liabilities can include claims against enterprises that are not acknowledged as debts.
- These claims may arise from disputes, pending legal cases, or other uncertain events.
- Even though the enterprises do not recognize them as debts, they may still have to settle these claims if they are proven valid in the future.
2. Guarantees given in respect of third parties:
- Contingent liabilities also include guarantees given by an entity on behalf of third parties.
- These guarantees may require the entity to fulfill the obligations of the third party if they fail to do so.
- The actual liability arises only when the third party defaults on their obligations.
3. Liabilities in respect of bills dishonored:
- Dishonored bills are also considered contingent liabilities.
- When a bill is dishonored, the party who presented the bill may hold the entity responsible for its payment.
- The entity becomes liable for the payment only if it is unable to collect the amount from the party who had issued the bill.
4. Penalty imposed by Excise officer for violation of a provision of the Central Excise Act:
- This is not a contingent liability because it is a direct consequence of a violation of a provision of the Central Excise Act.
- When an entity violates a provision of the Act, a penalty is imposed by the Excise officer as per the law.
- This penalty is not uncertain or potential but is a definite liability that the entity has to pay as a result of its non-compliance.
Therefore, out of the given options, the penalty imposed by the Excise officer for violation of a provision of the Central Excise Act is not a contingent liability.
Out of the given options, the correct answer is option 'D' - Penalty imposed by Excise officer for violation of a provision of the Central Excise Act. Let's understand why this is not a contingent liability.
Explanation:
1. Claims against enterprises not acknowledged as debts:
- Contingent liabilities can include claims against enterprises that are not acknowledged as debts.
- These claims may arise from disputes, pending legal cases, or other uncertain events.
- Even though the enterprises do not recognize them as debts, they may still have to settle these claims if they are proven valid in the future.
2. Guarantees given in respect of third parties:
- Contingent liabilities also include guarantees given by an entity on behalf of third parties.
- These guarantees may require the entity to fulfill the obligations of the third party if they fail to do so.
- The actual liability arises only when the third party defaults on their obligations.
3. Liabilities in respect of bills dishonored:
- Dishonored bills are also considered contingent liabilities.
- When a bill is dishonored, the party who presented the bill may hold the entity responsible for its payment.
- The entity becomes liable for the payment only if it is unable to collect the amount from the party who had issued the bill.
4. Penalty imposed by Excise officer for violation of a provision of the Central Excise Act:
- This is not a contingent liability because it is a direct consequence of a violation of a provision of the Central Excise Act.
- When an entity violates a provision of the Act, a penalty is imposed by the Excise officer as per the law.
- This penalty is not uncertain or potential but is a definite liability that the entity has to pay as a result of its non-compliance.
Therefore, out of the given options, the penalty imposed by the Excise officer for violation of a provision of the Central Excise Act is not a contingent liability.
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Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer?
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Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer?.
Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not a contingent liability?a)Claims against enterprises not acknowledge as debtsb)Guarantees given in respect of the third partiesc)Liabilities in respect of bills dishonouredd)Penalty imposed by Excise officer for violation of a provision of the Central Excise Act.Correct answer is option 'D'. Can you explain this answer?.
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