Skip to main content

Business Accounting Horngren's Financial & Managerial Accounting (5th Edition)

Contingent liability : It is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future. To Explain : The accounting for contingent liabilities.

Contingent liability : It is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future. To Explain : The accounting for contingent liabilities.

Solution Summary: The author explains the accounting for contingent liabilities based on the likelihoods of the event occurring in the future.

Horngren's Financial & Managerial Accounting (5th Edition)

Horngren's Financial & Managerial Accounting (5th Edition)

5th Edition

ISBN: 9780133866292

Author: Tracie L. Miller-Nobles, Brenda L. Mattison, Ella Mae Matsumura

Publisher: PEARSON

See similar textbooks

Concept explainers

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 conting…

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 11, Problem 11.1CTCA

To determine

Contingent liability: It is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

To Explain: The accounting for contingent liabilities.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

Blurred answer

Chapter 11, Problem 11.1CTFSC

Chapter 12, Problem 1QC

Students have asked these similar questions

1. What are contingent liabilities and could you give some examples of contingent liabilities? Which two conditions have to be met in order to report a contingent liability on a balance sheet?

Give examples of the 4 types of current liabilities and how can it be explained in each scenarios.

Can you please describe contingent liabilities and how to account for and/or report them.

Chapter 11 Solutions

Horngren's Financial & Managerial Accounting (5th Edition)

Ch. 11 - Prob. 1QC Ch. 11 - On January 1, 2016, a business borrowed 18,000 on...Ch. 11 - A company sells 180,000 (selling price) of goods...Ch. 11 - Prob. 4QC Ch. 11 - Prob. 5QC Ch. 11 - Prob. 6QC Ch. 11 - Prob. 7QC Ch. 11 - Vega Company expects to pay a 4% bonus on net...Ch. 11 - Prob. 9QC Ch. 11 - Prob. 10QC

Ch. 11 - Prob. 1RQ Ch. 11 - What is a current liability? Provide some examples...Ch. 11 - How is sales tax recorded? Is it considered an...Ch. 11 - How do unearned revenues arise?Ch. 11 - What do short-term notes payable represent?Ch. 11 - Coltrane Company has a 5,000 note payable that is...Ch. 11 - Prob. 7RQ Ch. 11 - Prob. 8RQ Ch. 11 - Prob. 9RQ Ch. 11 - Prob. 10RQ Ch. 11 - What are the two main controls for payroll?...Ch. 11 - When do businesses record warranty expense, and...Ch. 11 - Prob. 13RQ Ch. 11 - Prob. 14RQ Ch. 11 - Prob. 15RQ Ch. 11 - Determining current versus long-term liabilities...Ch. 11 - Prob. 11.2SE Ch. 11 - Prob. 11.3SE Ch. 11 - Accounting for a note payable On December 31,...Ch. 11 - Prob. 11.5SE Ch. 11 - Prob. 11.6SE Ch. 11 - Computing payroll amounts considering FICA tax...Ch. 11 - Prob. 11.8SE Ch. 11 - Prob. 11.9SE Ch. 11 - Prob. 11.10SE Ch. 11 - Prob. 11.11SE Ch. 11 - Accounting treatment for contingencies Fernandez...Ch. 11 - Prob. 11.13SE Ch. 11 - Recording sales tax Consider the following...Ch. 11 - Prob. 11.15E Ch. 11 - Recording and reporting current liabilities...Ch. 11 - Journalizing current liabilities Erik OHern...Ch. 11 - Prob. 11.18E Ch. 11 - Recording employer payroll taxes and employee...Ch. 11 - Prob. 11.20E Ch. 11 - Prob. 11.21E Ch. 11 - Prob. 11.22E Ch. 11 - Prob. 11.23E Ch. 11 - Prob. 11.24E Ch. 11 - Prob. 11.25AP Ch. 11 - Prob. 11.26AP Ch. 11 - Journalizing liability transactions T he following...Ch. 11 - Journalizing liability transactions The following...Ch. 11 - Prob. 11.29AP Ch. 11 - Prob. 11.30BP Ch. 11 - Prob. 11.31BP Ch. 11 - Prob. 11.32BP Ch. 11 - Prob. 11.33BP Ch. 11 - Prob. 11.34BP Ch. 11 - Prob. 11.35CP Ch. 11 - Prob. 11.1CTDC Ch. 11 - Sell-Soft is the defendant in numerous lawsuits...Ch. 11 - Prob. 11.1CTEI Ch. 11 - Derails about a company's liabilities appear in a...Ch. 11 - Prob. 11.1CTCA

Knowledge Booster

Background pattern image

Accounting

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

SEE MORE QUESTIONS

Recommended textbooks for you

Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Principles of Accounting Volume 1
Accounting
ISBN:9781947172685
Author:OpenStax
Publisher:OpenStax College

Text book image

Cornerstones of Financial Accounting

Accounting

ISBN:9781337690881

Author:Jay Rich, Jeff Jones

Publisher:Cengage Learning

Text book image

Principles of Accounting Volume 1

Accounting

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax College

SEE MORE TEXTBOOKS