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Business Accounting FIN. ACC.:TOOLS F/BUS DECISION MAKING

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

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

Solution Summary: The author explains that contingent liabilities are undefined future events that may be turn out to be liabilities for organizations in forecoming period.

FIN. ACC.:TOOLS F/BUS DECISION MAKING

FIN. ACC.:TOOLS F/BUS DECISION MAKING

9th Edition

ISBN: 9781119791089

Author: Kimmel

Publisher: WILEY

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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 10.23E

To determine

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

To determine

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

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Chapter 10, Problem 10.22E

Chapter 10, Problem 10.24E

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Chapter 10 Solutions

FIN. ACC.:TOOLS F/BUS DECISION MAKING

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