4. Mr. Saeed sold his car for PKR 1.5 million which he had purchased for PKR 1.6 million. He mentioned the details about it to the counterparty including total costs (PKR 1.6 mn). This type of sale is known as Murabaha. a. True b. False

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Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.