Final answer:
The correct answer to the student's question is 'Contingent' liability, which refers to potential financial obligations dependent on future occurrences related to past events.
Step-by-step explanation:
A potential obligation arising from a past event is called a(n) Contingent liability.Contingent liabilities are potential obligations that may become actual liabilities in the future depending on the occurrence of certain events. These events are typically outside the control of a company and may cause an economic outflow from the entity if they do occur. Contingent liabilities are not recognized in the financial statements since they are uncertain, instead, they are disclosed only if there is a reasonable possibility that the obligation will be required to be settled. Common examples of contingent liabilities include pending lawsuits, product warranties, or guarantees. Understanding contingent liabilities is crucial for both accounting professionals and investors as they can affect a company's liquidity and financial health if they become actual liabilities.