Why the Company does not have to record these contingent liabilities .

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Answer 1

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine

To Explain: Why the Company does not have to record these contingent liabilities.

(b)

To determine

To Comment: If any implications for analysis of the financial statements.

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Answer 2

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine

To Explain: Why the Company does not have to record these contingent liabilities.

(b)

To determine

To Comment: If any implications for analysis of the financial statements.

Expert Solution & Answer

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Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine

To Explain: Why the Company does not have to record these contingent liabilities.

(b)

To determine

To Comment: If any implications for analysis of the financial statements.

Expert Solution & Answer

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Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine

To Explain: Why the Company does not have to record these contingent liabilities.

(b)

To determine

To Comment: If any implications for analysis of the financial statements.

Expert Solution & Answer

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Check out a sample textbook solution

See solution

Answer 5

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine

To Explain: Why the Company does not have to record these contingent liabilities.

(b)

To determine

To Comment: If any implications for analysis of the financial statements.

Answer 6

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine

To Explain: Why the Company does not have to record these contingent liabilities.

Answer 7

Chapter 10, Problem 10.19E

(a)

Contingencies

Contingencies are referred to as the undefined future events that may be turn out to be the possible liabilities for the organizations in fore coming period. Examples of contingent liabilities are law suits, environmental cleanup obligations, and warranties for products.

To determine