1. Assume that your friend Jackie Chan, who is a Literature major, asks you to define and discuss the nature of a liability. Assist him by preparing a definition of a liability and by explaining to him what you believe are the elements or factors inherent in the concept of a liability. 2. How are the terms “probable” and “virtually certain” related to provisions and contingencies? 3. Explain the difference between a legal obligation and a constructive obligation. 4. The following are selected 2019 transactions of Kelly Company a. October 1: Purchased inventory from Sid Corporation on account $100,000. Kelly records purchases gross and uses a periodic system. b. November 1: Issued a $60,000 6-month 10% note to Sid in payment of account. c. November 1: Borrowed $80,000 from FCB Bank by signing a 15 month, zero interest bearing $110,000 note. Required: 1. Prepare the journal entries for the transactions above. 2. Prepare the adjusting entries as at December 2019

Q: At what point would it be necessary to purchase a Personal Liability Umbrella policy?

A: Umbrella policies are relatively inexpensive so they are worth the inevstment.

Q: 34-Which of the following is NOT a contingent liability? a. Product warranty b. Pending law suit…

A:

Q: When should a contingent liability be recognized and reported on the financial statements?  A.…

A: Contingent liability: A liability can occur on future uncertain events.

Q: Question 5 You are required to refer to the conceptual Framework and especially the two factors…

A: Answer 5.  According to the accounting frame work,  Warranty cost/Expense treated as contingent…

Q: An obligation that is contingent on the occurrence of a future event should be reported in the…

A: Financial statements: The financial statements refer to the combination of a various statements like…

Q: What is the consideration for the insurer in an insurance contract?

A: Contract:   Contract is an agreement among two parties or more parties which includes enforceable…

Q: Is it possible to distinguish between long-term liability and short-term responsibility?

A: The Answer:

Q: Under what circumstances is a contingent liability reflected in the accounting records as though an…

A: Contingent liability: Liability that can occur in future depending on the outcome of an uncertain…

Q: Event is reasonably possible but amount is not estimable Choose.. + Event is remote and amount is…

A: If the Event is reasonably possible but the amount is not estimable, disclosure of contingency is…

Q: For a liability to be recognised within the financial statements, it needs to be reasonably apparent…

A: As per IFRS  a liability is that the future payment of which results…

Q: Generally, the auditor could be legally liable under?

A: Auditing:   Auditing refers to an independent examination of financial information of any…

Q: Assume that your friend Will Morris, who is a music major, asks you to define and discuss the nature…

A: Liabilities: The claims creditors have over assets or resources of a company are referred to as…

Q: When is a contingent liability is reported?   Select one: when the likelihood of the loss is…

A: The question is asking about the conditions under which a contingent liability is reported in…