Describe whether excerpt describes contingent liability .

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 8, Problem 16E

1

To determine

Describe whether excerpt describes contingent liability.

2.

To determine

Provide conditions that would record such a contingency.

3.

To determine

Provide journal entry to record the $381 million.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Provide correct answer

For the system shown in figure below, the per unit values of different quantities are E-1.2, V 1, X X2-0.4. Xa-0.2 Determine whether the system is stable for a sustained fault. The fault is cleared at 8-60°. Is the system stable? If so find the maximum rotor swing. Find the critical clearing angle. E25 G X'd 08 CB X2 F CB V28 Infinite bus

Geisner Inc. has total assets of $1,000,000 and total liabilities of $600,000. The industry average debt-to-equity ratio is 1.20. Calculate Geisner's debt-to-equity ratio and indicate whether the company's default risk is higher or lower than the average of other companies in the industry.

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 8, Problem 16E

1

To determine

Describe whether excerpt describes contingent liability.

2.

To determine

Provide conditions that would record such a contingency.

3.

To determine

Provide journal entry to record the $381 million.

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 8, Problem 16E

1

To determine

Describe whether excerpt describes contingent liability.

2.

To determine

Provide conditions that would record such a contingency.

3.

To determine

Provide journal entry to record the $381 million.

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 8, Problem 16E

1

To determine