Which of the following statements is correct?

A) A contingent liability is a class of liabilities.
B) A provision is a class of contingent liabilities.
C) A provision is a class of liabilities.
D) Contingent liabilities and provisions are classes of liabilities.

Contingent Liability

A potential financial obligation that may arise in the future, depending on the outcome of a specific event.

Liabilities

Financial obligations or debts that an entity owes to others, which must be settled in the future through the transfer of assets or services.

Provisions

Liabilities of uncertain timing or amount, set aside in anticipation of future obligations or costs.