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 event occurred after the issuance of financial statement and may require further audit enquiries.

Question

Want to see the full answer?

Answer 1

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 17.21MCQ

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 event occurred after the issuance of financial statement and may require further audit enquiries.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Consider the following cash flows on two mutually exclusive projects for the Bahamas Recreation Corporation (BRC). Both projects require an annual return of 14 percent. New Submarine Deepwater Fishing Year Ride 0 -$875,000 1 330,000 2 480,000 3 440,000 -$1,650,000 890,000 730,000 590,000 a-1. Compute the IRR for both projects. (Do not round intermediate calculations and enter your answers as a percent rounded to 2 decimal places, e.g., 32.16.) Deepwater Fishing Submarine Ride 19.16 % 17.50% a-2. Based on the IRR, which project should you choose? Deepwater Fishing Submarine Ride b-1. Calculate the incremental IRR for the cash flows. (Do not round intermediate calculations and enter your answer as a percent rounded to 2 decimal places, e.g., 32.16.) Incremental IRR 14.96 % b-2. Based on the incremental IRR, which project should you choose? Submarine Ride Deepwater Fishing

What is the possibility that cases are not readily bounded but may have blurry definitions? How to address Robert Yin statement and how to resolve the ‘not readily bound’ case? Please help explain.

An investment that is worth $44,600 is expected to pay you $212,205 in X years and has an expected return of 18.05 percent per year. What is X?

Answer 2

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 17.21MCQ

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 event occurred after the issuance of financial statement and may require further audit enquiries.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

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 17.21MCQ

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 event occurred after the issuance of financial statement and may require further audit enquiries.

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 17.21MCQ

To determine