Loss contingency: Loss contingency involves uncertainty as to possible loss to an entity which can be resolved if any such events in the future do not occur. An entity must consider the most sufficient value to represent the contingent loss than any other value or amount. In case, there is no value provided which could represent the contingent loss, the firm must select the minimum value which could show the contingent loss in the financial statement. To prepare: The journal entry for the estimated contingency loss.

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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 13, Problem 13.14BE

To determine

Concept Introduction:

Loss contingency: Loss contingency involves uncertainty as to possible loss to an entity which can be resolved if any such events in the future do not occur. An entity must consider the most sufficient value to represent the contingent loss than any other value or amount. In case, there is no value provided which could represent the contingent loss, the firm must select the minimum value which could show the contingent loss in the financial statement.

To prepare: The journal entry for the estimated contingency loss.

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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 13, Problem 13.14BE

To determine

Concept Introduction:

Loss contingency: Loss contingency involves uncertainty as to possible loss to an entity which can be resolved if any such events in the future do not occur. An entity must consider the most sufficient value to represent the contingent loss than any other value or amount. In case, there is no value provided which could represent the contingent loss, the firm must select the minimum value which could show the contingent loss in the financial statement.

To prepare: The journal entry for the estimated contingency loss.

Expert Solution & Answer

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Answer 3

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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 13, Problem 13.14BE

To determine

Concept Introduction:

Loss contingency: Loss contingency involves uncertainty as to possible loss to an entity which can be resolved if any such events in the future do not occur. An entity must consider the most sufficient value to represent the contingent loss than any other value or amount. In case, there is no value provided which could represent the contingent loss, the firm must select the minimum value which could show the contingent loss in the financial statement.

To prepare: The journal entry for the estimated contingency loss.

Expert Solution & Answer

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Check out a sample textbook solution

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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 13, Problem 13.14BE

To determine