The term of Final Payment. Effects of Final Payment.

Q: Explain what is meant by future deductible amounts. Why is it important to understand this concept?

A: Future deductible amounts refer to the expenses that a business incurs in the current period but…

Q: What are the most frequent uses of contingent payments?

A: A contingent payment is a mechanism used in M&A whereby, in addition to an upfront payment,…

Q: Define Effective interest method.

A: Effective interest method: It refers to the method of accounting that is usually used for the…

Q: Write an equation for determining the value of the series of end-of-period payments?

A: Formula:

Q: When do prepayments occur? Accruals?

A:

Q: What is a prior-period adjustment?

A: Statement of retained earnings: This is a financial statement that shows the amount of net income…

Q: Explain the Accumulation of a Future Sum?

A: The concept which gives the value or worth of money held today at the future date due to its…

Q: How can we determine the amount of a periodic payment?

A: The amount of periodic payment is determined using the following formula:

Q: Ethics of accruals and deferrals.

A: Lets understand the meaning of accrual and deferrals. Accrual is a recording income and expense in…

Q: What is the purpose of the accrual tranche?

A: The diverse CMO bunches are known as a tranche. Gathering tranche too known as Z tranche is the…

Q: What examples can be used for the client on the advantages of the accrual method?

A: Accrual basis accounting recognizes business revenue and matching expenses when they are…

Q: What is the amount of the plan assets available to pay benefits? What are the factors that can cause…

A:

Q: Explain the Redemption process?

A: The question is based on the concept of redemption, which is mainly used for repayment of fixed…

Q: What is allowance method?

A: Definition:   Allowance method of accounting for uncollectible accounts: This is the accounting…

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.