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. The recording of contingent liability is based on the following likelihoods of the event occur in future: Remote Reasonably possible Probable To identify: The accounting treatment for contingencies.

Question

Want to see the full answer?

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 11, Problem 11.23E

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. The recording of contingent liability is based on the following likelihoods of the event occur in future:

Remote

Reasonably possible

Probable

To identify: The accounting treatment for contingencies.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

RDX Corporation's production budget for September is 22,000 units and includes the following component unit costs: direct materials, $7.50; direct labor, $12.00; variable overhead, $6.20. Budgeted fixed overhead is $55,000. Actual production in September was 23,400 units, actual unit component costs incurred during September include direct materials, $8.10; direct labor, $11.80; variable overhead, $6.50. Actual fixed overhead was $57,000, the standard fixed overhead application rate per unit consists of $2.50 per machine hour and each unit is allowed a standard of 1.2 hours of machine time. Calculate the fixed overhead budget variance.

What is the depreciation cost

Help with accounting question

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 11, Problem 11.23E

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. The recording of contingent liability is based on the following likelihoods of the event occur in future:

Remote

Reasonably possible

Probable

To identify: The accounting treatment for contingencies.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

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 11, Problem 11.23E

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. The recording of contingent liability is based on the following likelihoods of the event occur in future:

Remote

Reasonably possible

Probable

To identify: The accounting treatment for contingencies.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

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 11, Problem 11.23E

To determine