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

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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

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Problem 3-1B Identifying adjusting entries with explanations P1 P2 P3 P4 For journal entries 1 through 12, indicate the explanation that most closely describes it. You can use explanations more than once. A. To record payment of a prepaid expense. B. To record this period's use of a prepaid expense. C. To record this period's depreciation expense. D. To record receipt of unearned revenue. E. To record this period's earning of prior unearned revenue. F. To record an accrued expense. G. To record payment of an accrued expense. H. To record an accrued revenue. I. To record receipt of accrued revenue. 1. Interest Receivable 3,500 7. Cash 1,500 Interest Revenue 3,500 Accounts Receivable (from services) 1,500 2. Salaries Payable 9,000 8. Salaries Expense 7,000 Cash 9,000 Salaries Payable 7,000 3. Depreciation Expense 8,000 9. Cash 1,000 Accumulated Depreciation. 8,000 Interest Receivable 1,000 4. Cash 9,000 10. Unearned Revenue 9,000 Prepaid Rent Cash 3,000 3,000 5. Insurance Expense 4,000…

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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 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

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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

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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

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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 - Calculating gross and net pay (Learning Objective...

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

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

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