Answered: Can D make C’s estate liable for his…

Business

Accounting

Can D make C’s estate liable for his debt

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter6: Deductions And Losses: In General

Section: Chapter Questions

Problem 15DQ

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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

. A firm in which A, B and C were partners, placed an order with D for supplying certain goods on credit. Before D could supply the goods C died. D supplied the goods after C’s death, being totally ignorant about the fact. A and B subsequently became insolvent. Can D make C’s estate liable for his debt? Explain.

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Accounting for Current liabilities, Provisions and Contingencies

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