Whenever an organisation ordered some goods but it has not received the goods then it has to record contingent liabilities for the same. Some amount of fund balance must be allocated to that contingent liabilities. To select the correct option for account that is used to earmark the fund balance to recognise the contingent obligations of goods ordered but not yet received.

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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 17.3.2E

To determine

Concept Introduction: Whenever an organisation ordered some goods but it has not received the goods then it has to record contingent liabilities for the same. Some amount of fund balance must be allocated to that contingent liabilities.

To select the correct option for account that is used to earmark the fund balance to recognise the contingent obligations of goods ordered but not yet received.

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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 17.3.2E

To determine

Concept Introduction: Whenever an organisation ordered some goods but it has not received the goods then it has to record contingent liabilities for the same. Some amount of fund balance must be allocated to that contingent liabilities.

To select the correct option for account that is used to earmark the fund balance to recognise the contingent obligations of goods ordered but not yet received.

Expert Solution & Answer

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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 17.3.2E

To determine

Concept Introduction: Whenever an organisation ordered some goods but it has not received the goods then it has to record contingent liabilities for the same. Some amount of fund balance must be allocated to that contingent liabilities.

To select the correct option for account that is used to earmark the fund balance to recognise the contingent obligations of goods ordered but not yet received.

Expert Solution & Answer

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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 17.3.2E

To determine