In 2-3 paragraphs complete the following: Define gain contingency. Describe the accounting requirements for a gain contingency. Define contingency. What exactly is the company uncertain about—whether a future event will take place and result in a liability or whether a future event will take place that will confirm that a liability exists from an event that has already taken place?

Q: The principles and objectives that guide the creation of accounting information under accrual…

A: The matching principle, which is related to accrual accounting, asserts that an expense must be…

Q: Discuss and explain in details the steps of preparing Accrual basis accounting with one example and…

A: Accrual basis of accounting is that basis of accounting in which income and expenses are recorded in…

Q: What is a contingency? Why are contingencies important to users of financial statements? What are…

A: When there is a scenario in which the conclusion cannot be predicted and which must be handled in…

Q: When fresh start accounting is utilized, how are a company’s assets and its liabilities reported?

A: Except for deferred income taxes, all liabilities at the same time reported as future cash payments…

Q: Which of the following would you find in the financial statements? a) Information about principal,…

A: Financial statements are the documents or statements which show the results of the business,…

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: The adjusting entry to record a contingent liability requires a debit to a loss (or expense) account…

A: Contingent liability is a potential liability that arises as a result of past transactions but the…

Q: Generally accepted accounting principles require that companies use the _____ of accounting.…

A: Accounting concepts: These are the set of rules and guidelines which every company must follow in…

Q: Which of the following statement best describes the accounting concept of going concern? O Expenses…

A: Accounting Concept -The foundational guidelines, presumptions, and requirements that specify the…

Q: Management can estimate the amount of loss that will occur due to litigation against the company. If…

A: Contingent liabilityThe liability incurred at certain cases due to the happening that cannot be…

Q: define contingent liability and give an example. How would you management of a company distort a…

A: Solution Concept Contingent liability               Contingent liability means the liability which…

Q: each of the num red descriptions with the principie of assumption it best rellects. Description…

A: Accounting Principal/Assumption: The rules and standards that organizations must follow when…

Q: What are the rights of creditors (claims against the assets of the company--creditors' equity) that…

A: The creditor is the person to whom the company owes money at the later date. Creditors are the one…

Q: What are the two extreme approaches that a company might follow in determining appropriate…

A: The two approaches that company might follow in determining accounting policies to be followed under…

Q: You are approached to comment on a company’s accounting disclosure quality. As an accounting…

A: Accounting disclosures are the information that the company discloses with the financial information…

Q: What is a chance recently implemented by FASB that required a company to change its accounting…

A: In May 2014, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No.…

Financial Transaction Analysis

The transaction analysis is done with the help of the accounting equation. The basic accounting equation is alternatively known as the balance sheet equation is based on the double-entry system which says that for each transaction happening in a business, at least two accounts should be affected I.e. both the debit side and the credit side should be equal. The Accounting Equation is