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Which one of the following would be considered a contingent liability and recorded as a lability on the balance sheet? Select one & A company estimates that it will probably have to pay $1,200,000 to the Department of Environment Protection for a chemical spi Ob. The company has access to a line of credit with a bank in the amount of $1,500,000 OCA company has $845,000 worth of bonds outstanding Od The company believes that it is reasonably possible it will lose a lawsuit but is unable to determine the possible damages mpany owes $100,000 on inventories purchased on credit

Which one of the following would be considered a contingent liability and recorded as a lability on the balance sheet? Select one & A company estimates that it will probably have to pay $1,200,000 to the Department of Environment Protection for a chemical spi Ob. The company has access to a line of credit with a bank in the amount of $1,500,000 OCA company has $845,000 worth of bonds outstanding Od The company believes that it is reasonably possible it will lose a lawsuit but is unable to determine the possible damages mpany owes $100,000 on inventories purchased on credit

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Which one of the following would be considered a contingent liability and recorded as a liability on the balance sheet? Select one a. A company estimates that it will probably have to pay $1,200,000 to the Department of Environment Protection for a chemical spill b. The company has access to a line of credit with a bank in the amount of $1.500,000 A company has $845,000 worth of bonds outstanding. d. The company believes that it is reasonably possible it will lose a lawsuit but is unable to determine the possible damages O A company owes $100,000 on inventories purchased on credit
Transcribed Image Text:Which one of the following would be considered a contingent liability and recorded as a liability on the balance sheet? Select one a. A company estimates that it will probably have to pay $1,200,000 to the Department of Environment Protection for a chemical spill b. The company has access to a line of credit with a bank in the amount of $1.500,000 A company has $845,000 worth of bonds outstanding. d. The company believes that it is reasonably possible it will lose a lawsuit but is unable to determine the possible damages O A company owes $100,000 on inventories purchased on credit
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