Provide an example for known liability, estimated liability, and contingent liability .

Question

Want to see more full solutions like this?

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 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Students have asked these similar questions

None

For the year, Imperial Corp.'s gross profit is $210,000, sales are $350,000, and ending inventory is $80,000. If net purchases are $120,000, what is the COGS? a. $110,000 b. $140,000 c. $150,000 d. $160,000

Under absorption costing what would be the value of the ending inventory?

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 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

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 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

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 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Want to see more full solutions like this?

Subscribe now to access step-by-step solutions to millions of textbook problems written by subject matter experts!

Answer 5

Chapter 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Answer 6

Chapter 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Answer 7

Chapter 9, Problem 1DQ

To determine

Provide an example for known liability, estimated liability, and contingent liability.

Answer 8

Expert Solution & Answer

Explanation of Solution

Liabilities: Liabilities are debt and obligations of a business. These are the claims against the resources that a business owes to outsiders of the company. Liabilities may be short-term or long-term depending upon the time duration in which it is paid back to the creditors.

Known liability: The estimated amount of a transaction which is occurred in the past is called as known liability.

Example: Accounts payable

Estimated liability: The obligation that a business needs to pay to the employees, or customer, or government is called as estimated liability.

Example: Estimated warranty expense

Contingent liability: Contingent liability is a potential liability of a company that depends on a future event. It is the result of an uncertain event. For paying a contingent liability, some event should happen in the future.

Example: Lawsuit

Answer 9

Expert Solution & Answer

Answer 10

Expert Solution & Answer

Answer 11

Ch. 9.A - Calculate employee payroll (Learning Objective 8)...Ch. 9.A - Calculate net pay (Learning Objective 8) 5-10 min....Ch. 9.A - Employer payroll costs (Learning Objective 8) 5-10...Ch. 9.A - Prob. 4AE Ch. 9.A - Prob. 5AE Ch. 9.A - Prob. 6AE Ch. 9.A - Prob. 7BE Ch. 9.A - Prob. 8BE Ch. 9.A - Calculating gross and net pay (Learning Objective...Ch. 9.A - Prob. 10AP

Provide an example for known liability, estimated liability, and contingent liability .

Concept explainers

Provide an example for known liability, estimated liability, and contingent liability.

Explanation of Solution

Want to see more full solutions like this?

Chapter 9 Solutions