Which of the following statements best describes a contingent liability? A contingent liability is a:

a. liability, the amount of which is known and which definitely must be paid.

b. potential liability that has arisen because of a past transaction or event, but its ultimate outcome will not be known until a future event occurs or fails to occur.

c. liability that will only be incurred if a particular future event takes place.

d. potential liability that will be incurred if a natural disaster happens.