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 state: the major business units of Incorporation R.

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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 11.7CP

A.

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 state: the major business units of Incorporation R.

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

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Most companies pay current liabilities Select one: a. out of current assets. b. by issuing interest-bearing notes payable. C. by issuing stock. d. by creating long-term liabilities.

Don't use Ai. Answer in step by step with explanation.

Match the following terms or phrases in (a–g) with the explanations in 1–8. Terms or phrases may be used more than once. Question 11 options: Current assets/Current liabilities Probable likelihood and estimable liability Measures the “instant” debt-paying ability of a company Current assets – Current liabilities (Cash + Temporary investments + Accounts receivable)/Current liabilities Cash + Temporary investments + Accounts receivable Probable likelihood of a liability but cannot be estimated Remote contingent liability Reasonably possible likelihood of a liability 1. Current ratio 2. Working capital 3. Quick assets 4. Quick ratio 5. Record an accrual and disclose in the notes to the financial statements 6. Disclose only in notes to financial statements 7. No disclosure needed in notes to financial statements

Answer 2

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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 11.7CP

A.

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 state: the major business units of Incorporation R.

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

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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 11, Problem 11.7CP

A.

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 state: the major business units of Incorporation R.

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

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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 11, Problem 11.7CP

A.

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 state: the major business units of Incorporation R.

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

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Answer 5

Chapter 11, Problem 11.7CP

A.

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 state: the major business units of Incorporation R.

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

Answer 6

Chapter 11, Problem 11.7CP

A.

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 state: the major business units of Incorporation R.

Answer 7

Chapter 11, Problem 11.7CP

A.

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 state: the major business units of Incorporation R.

Answer 8

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

Answer 9

B.

To determine

To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

Answer 10

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Answer 11

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Answer 12

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Answer 13

Ch. 11 - Does a discounted note payable provide credit...Ch. 11 - Employees are subject to taxes withheld from their...Ch. 11 - Prob. 3DQ Ch. 11 - Prob. 4DQ Ch. 11 - Prob. 5DQ Ch. 11 - Prob. 6DQ Ch. 11 - To match revenues and expenses properly, should...Ch. 11 - Prob. 8DQ Ch. 11 - When should the liability associated with a...Ch. 11 - Prob. 10DQ

Solution Summary: The author explains that Incorporation R manufactures and distributes tobacco products and has more than 100 pending cases, out of which 28 class actions and 2 health-related issues.

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To explain: the reason for Incorporation R requiring so many pages of contingency liabilities.

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