17. Gain contingencies should a. be accrued if they are probable and can be reasonably estimated b. not be accrued in the accounts c. be accrued only if they are the result of litigation or government appropriation d. not be accrued or disclosed

17. Gain contingencies should a. be accrued if they are probable and can be reasonably estimated b. not be accrued in the accounts c. be accrued only if they are the result of litigation or government appropriation d. not be accrued or disclosed

Auditing: A Risk Based-Approach to Conducting a Quality Audit

10th Edition

ISBN:9781305080577

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter17: Other Services Provided By Audit Firms

Section: Chapter Questions

Problem 22MCQ

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

Question

17. Gain contingencies should

a. be accrued if they are probable and can be reasonably estimated
b. not be accrued in the accounts
c. be accrued only if they are the result of litigation or government appropriation
d. not be accrued or disclosed in the footnotes

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