Liabilities are obligations of the business which it need to pay in future. Liabilities can be categories into current or noncurrent liabilities. A business would like to minimize its liabilities to show a better credit position. Contingent liabilities are the future probable liabilities which are highly expected to become actual liabilities, for example; highly probable penalties on losing a legal matter. To choose: The way auditor will use to identify the contingent liability .

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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 17, Problem 17.13MCQ

To determine

Concept Introduction:

Liabilities are obligations of the business which it need to pay in future. Liabilities can be categories into current or noncurrent liabilities. A business would like to minimize its liabilities to show a better credit position.

Contingent liabilities are the future probable liabilities which are highly expected to become actual liabilities, for example; highly probable penalties on losing a legal matter.

To choose: The way auditor will use to identify the contingent liability.

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Listed here, are the 2018 and 2019 balance sheets. motors. and income statements,, for Otago Bay Marine Motors, a major manufacturer of top-of-the-line outboard a. On the basis of the information provided, calculate the following financial ratios for 2018 and 2019: b. Considering the financial ratios you computed, along with the industry averages, how would you characterize the financial condition of Otago Bay Marine Motors? Explain. a. Calculate the following financial ratios for 2018 and 2019. (Round to two decimal places.) Current ratio Otago Bay Marine Motors 2019 2018

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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 17, Problem 17.13MCQ

To determine

Concept Introduction:

Liabilities are obligations of the business which it need to pay in future. Liabilities can be categories into current or noncurrent liabilities. A business would like to minimize its liabilities to show a better credit position.

Contingent liabilities are the future probable liabilities which are highly expected to become actual liabilities, for example; highly probable penalties on losing a legal matter.

To choose: The way auditor will use to identify the contingent liability.

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 17, Problem 17.13MCQ

To determine

Concept Introduction:

Liabilities are obligations of the business which it need to pay in future. Liabilities can be categories into current or noncurrent liabilities. A business would like to minimize its liabilities to show a better credit position.

Contingent liabilities are the future probable liabilities which are highly expected to become actual liabilities, for example; highly probable penalties on losing a legal matter.

To choose: The way auditor will use to identify the contingent liability.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

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 17, Problem 17.13MCQ

To determine