1 and 2 Contingent Liability Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies: Income tax disputes Discounted notes receivable Lawsuits Debt guarantees Failure to follow government regulations Rules of Debit and Credit: Following rules are followed for debiting and crediting different accounts while they occur in business transactions: Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities. Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses. To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Question

Want to see the full answer?

Answer 1

Question

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Need help with this question solution general accounting

Provide correct answer accounting question

I need accounting question answer

Answer 2

Question

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 5

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Answer 6

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Answer 7

Chapter 13, Problem 13.8BYP

To determine

1 and 2

Contingent Liability

Contingent liability is one form of liability that arises based on a particular outcome of a specific event. They are possible obligation that might arise or might not arise based on the future events. It is otherwise called as probable liability or eventual liability. Following are examples of contingencies:

Income tax disputes

Discounted notes receivable

Lawsuits

Debt guarantees

Failure to follow government regulations

Rules of Debit and Credit:

Following rules are followed for debiting and crediting different accounts while they occur in business transactions:

Debit all increase in assets, expenses and dividends, all decrease in liabilities, revenues and stockholders’ equities.

Credit all increase in liabilities, revenues, and stockholders’ equities, and all decrease in assets and expenses.

To prepare: Appropriate reporting of each situation and memo to audit manager explaining reasons for each situations.

Answer 8

Expert Solution & Answer

Answer 9

Expert Solution & Answer

Answer 10

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 11

Ch. 13 - What are the essential characteristics of...Ch. 13 - Prob. 13.2Q Ch. 13 - Bronson Distributors owes a supplier 100,000 on...Ch. 13 - Bank loans often are arranged under existing lines...Ch. 13 - Prob. 13.5Q Ch. 13 - Prob. 13.6Q Ch. 13 - Salaries of 5,000 have been earned by employees by...Ch. 13 - Prob. 13.8Q Ch. 13 - Prob. 13.9Q Ch. 13 - Prob. 13.10Q

Solution Summary: The author explains that Contingent Liability is one form of liability that arises based on a particular outcome. The following paragraphs explain about the means of reporting and reason for each contingency.

Want to see the full answer?

Chapter 13 Solutions