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Business Accounting Intermediate Accounting

Prepare journal entry to record the transactions.

Prepare journal entry to record the transactions.

Intermediate Accounting

Intermediate Accounting

1st Edition

ISBN: 9780132162302

Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella

Publisher: PEARSON

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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.A, Problem 1P

Part 1

To determine

Prepare journal entry to record the transactions.

Part 2.

To determine

Determine the method to classify liability for base warranty and unearned revenue.

Part 3.

To determine

Prepare journal entry to record estimated liability.

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Chapter 13, Problem 13.1Q

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Chapter 13.A Solutions

Intermediate Accounting

Ch. 13.A - Prob. 1P

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