INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
10th Edition
ISBN: 9781264770335
Author: SPICELAND
Publisher: MCG
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Chapter 13, Problem 13.16Q
To determine
Loss contingency: Loss contingency is contingency where existing situation or circumstances where potential losses are resolved and thus, future events are occurred. Examples for loss contingency are as follows:
- 1. Possible repair to a product under any warranty
- 2. Defendant in a lawsuit
- 3. Uncollectible receivables
To list: the three categories of likelihood that a future event(s) confirm the incurrence of the liability for a loss contingency.
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Students have asked these similar questions
When is a contingent liability is reported?
Select one:
when the likelihood of the loss is reasonably possible and a range of outcomes can be estimated
when the future events will possibly occur, and the amount of the loss is material
when the amount of the loss can be reasonably estimated
when the likelihood of the loss is probable and the amount of the loss can be reasonably estimated
What are the two criteria that must be met to record a loss contingency?
. In determining the amount of a provision, a company using IFRS should generally measure:
a. using the midpoint of the range between the lowest possible loss and the highest possible loss.
b. using the minimum amount of the loss in the range.
c. using the best estimate of the amount of the loss expected to occur.
d. using the maximum amount of the loss in the range.
Chapter 13 Solutions
INTER. ACCOUNTING - CONNECT+ALEKS ACCESS
Ch. 13 - What are the essential characteristics of...Ch. 13 - Prob. 13.2QCh. 13 - Bronson Distributors owes a supplier 100,000 on...Ch. 13 - Bank loans often are arranged under existing lines...Ch. 13 - Prob. 13.5QCh. 13 - Prob. 13.6QCh. 13 - Salaries of 5,000 have been earned by employees by...Ch. 13 - Prob. 13.8QCh. 13 - Prob. 13.9QCh. 13 - Prob. 13.10Q
Ch. 13 - Prob. 13.11QCh. 13 - Prob. 13.12QCh. 13 - Long-term obligations usually are reclassified and...Ch. 13 - How do IFRS and U.S. GAAP differ with respect to...Ch. 13 - Prob. 13.15QCh. 13 - Prob. 13.16QCh. 13 - Prob. 13.17QCh. 13 - Prob. 13.18QCh. 13 - Suppose the analysis of a loss contingency...Ch. 13 - Prob. 13.20QCh. 13 - Distinguish between the accounting treatment of a...Ch. 13 - At December 31, the end of the reporting period,...Ch. 13 - After the end of the reporting period, a...Ch. 13 - Prob. 13.24QCh. 13 - Prob. 13.25QCh. 13 - Prob. 13.26QCh. 13 - Prob. 13.27QCh. 13 - Prob. 13.28QCh. 13 - Bank loan; accrued interest LO132 On October 1,...Ch. 13 - Non-interest-bearing note; accrued interest LO132...Ch. 13 - Determining accrued interest LO132 On July1,...Ch. 13 - Commercial paper LO132 Branch Corporation issued...Ch. 13 - Non-interest-bearing note; effective interest rate...Ch. 13 - Sales tax LO133 DuringDecember, Rainey Equipment...Ch. 13 - Prob. 13.12BECh. 13 - Prob. 13.13BECh. 13 - Contingency LO135, LO136 Skill Hardware is the...Ch. 13 - Contingency LO135, LO136 Bell International can...Ch. 13 - Prob. 13.16BECh. 13 - Prob. 13.17BECh. 13 - FASB codification research LO133, LO134, LO135...Ch. 13 - Current noncurrent classification of debt; Sprint...Ch. 13 - Prob. 13.12ECh. 13 - Prob. 13.14ECh. 13 - Extended warranties LO135, LO136 Carnes...Ch. 13 - Disclosures of liabilities Indicate (by letter)...Ch. 13 - Prob. 13.11PCh. 13 - Prob. 13.2DMPCh. 13 - Prob. 13.3DMPCh. 13 - Prob. 13.4DMPCh. 13 - Prob. 13.18DMPCh. 13 - Real World Case 1319 Contingencies LO135 Real...Ch. 13 - Prob. 1CCTCCh. 13 - Prob. 2CCTC
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- What disclosures are required for remote likelihood of losses?arrow_forwardWhat disclosure is made if a loss contingency is reasonably possible?arrow_forwardUnder IFRS, a liability is recorded if the chance of occurrence is Select one: A. probable. B. likely. C. undeterminable. D. unlikely.arrow_forward
- When a contingent liability exists, the likelihood for loss can be evaluated as probable, reasonably possible, or remote. A remote loss is a loss where the chance of occurrence is slight a loss that is likely to occur a loss where the chance of occurrence is moderate falls between the chance of occurrence is slight and a loss is likely to occurarrow_forwardDefine risk of material misstatement.arrow_forwardWhich of the following best describes a contingent liability that is likely to occur but cannot be reasonably estimated? A. reasonably possible B. probable and estimable C. probable and inestimable D. remotearrow_forward
- Q3) Identify and describe the two components of the risk of material misstatements.arrow_forwardDistinguish between normal and abnormal losses and explain.arrow_forwardWhen recognizing a contingent liability, if the future event is probable (likely) and the amount can be reasonably estimated, what are we required to do? A.Group of answer choices B.Do not record or disclose C.Record the liability D. Disclose in notes on financial statementsarrow_forward
- Which of the following best describes a contingent liability that is unlikely to occur?A. remoteB. probable and estimableC. reasonably possibleD. probable and inestimablearrow_forwardChoose one example of an asset, and referring to the characteristics of assets,explain why your chosen example meets the asset definition criteria.Choose one example of a liability, and referring to the characteristics ofliabilities, explain why your chosen example meets the liability definitioncriteria.arrow_forwardNeed correct answerarrow_forward
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