define contingent liability and give an example. How would you management of a company distort a liability if they wish to report less liability in the financial statement.

Q: if the shareholders position is not protected by a contract unlike the provider of debt how is it in…

A: A shareholder seems to be a person or organization who holds stock in a corporation. Shareholders…

Q: Explain the difference between conservative and aggressive accounting practices.

A:

Q: Which one of the following is other indicator or events or conditions that may cast significant…

A: ‘’Since you have asked multiple questions, we will solve the first question for you. If you want any…

Q: Define the phrase “earnings management.” Under what conditions, if any, is earnings management…

A: Payments and receivables are managed in connection to purchases in earnings management. It is done…

Q: Define materiality.  How does materiality come into play when assessing financial statement…

A: Materiality is the threshold above which missing or incorrect information in the financial…

Q: What does the phrase "limited liability" mean in a corporate context?

A: Limited liability means owners liability is limited to the invested capital in the firm.

Q: Which of the following is not an incentive for company managers to exercise their accounting…

A: Allowing corporate officials to manage the disclosure of accounting information through the use of…

Q: When the amount of a contingent liability cannot be reasonably estimated but its likelihood is…

A: There are three types of contingent liabilities and their treatment   SR. NO. TYPE TREATMENT…

Q: why there is material uncertainty in the company?

A: There are several problems which are faced by the companies for both internal sources and external…

Q: When should a contingent liability be recognized and reported on the financial statements?  A.…

A: Contingent liability: A liability can occur on future uncertain events.

Q: The risk to investors that a company’s financial statements may be materially misleading is calleda.…

A: Information risk: The risk that arises due to the floatation of misleading or false information in a…

Q: If the chance that a risk will occur cannot be reasonably predicted or the possible financial loss…

A: An uninsurable risk is one that presents an unknown or unacceptable risk of loss for an insurance…

Q: If a firm does not provide for accrued liabilities, what problems may thefirm face?

A: Assuming this is the case, at that point. The Organization has not gotten the accrued liabilities.…

Q: Which of the following arguments is not in favour of entities being required to comply with…

A: Accounting Standards are standard set of rules or practices which must be followed at the time of…

Q: auditor’s written management representation

A: Option A is wrong because written representations are not made for cost-benefit justification.…

Q: Liabilities are obligations of a company to creditor. Select one: True False

A: Liabilities are obligations of a company to creditor. Answer: False Explanation: A liability is a…

Q: “Management accounting should not fit the straitjacket of financial accounting.” Explain and givean…

A: Financial accounting is concerned primarily with the financial data related to an organization…

Q: Define information risk and explain how the financial statement auditing process helps to reduce…

A: Information risk is the risk that the information disseminated by a company will be materially tend…

Q: Is it permissible to violate generally accepted accounting principles (GAAP) when preparing reports…

A: Generally Accepted Accounting Principles (GAAP): The Generally Accepted Accounting Principles (GAAP…

Q: The going concern assumption infers that a company will continue to operate into the future. True…

A: Going concern means that the company with an assumption operates for the forseeable future.

Q: The accounting assumption or principle of is being violated if a company that is a party to major…

A: Solution: The accounting assumption or principal of Full disclosure is being violated if a company…

Q: ted. Does the expected loss meet the definitio

A: Conceptual Framework A conceptual framework is a written or visual representation of how variables…

Q: In very few cases will a company fall under the purview of more than one set of regulations or…

A: Every company has to taxes on its income earned.

Q: It is an event that creates a legal or constructive obligation that results in an enterprise having…

A: "Since you have asked multiple questions, we will solve only first question for you. If you want any…

Q: Companies are not required to accrue all contingent liabilities on their balance sheets because the…

A: Accounting for a contingency: The basic concept is that you should only record/accrue for a loss…

Q: Under GAAP, companies are permitted to recognize bad debt expense based on estimated bad-debt losses…

A: The company makes cash as well as sales on account. The bad debt expenses represent the estimated…

Q: Companies are not required to accrue all contingent liabilities on their balance sheets because the…

A: Introduction: Contingent liability refers to a claim that may or may not materialize in the future.…

Q: Explain whether the following statement is true or false: Only weak companies issuedebentures.

A: A long-term liability that is issued by a company with a fixed interest rate to raise the fund for…

Q: How Limited liability is different to unlimited liability? Briefly explain with an example of…

A: Limited liability is the type of organization where loss to the corporation will not exceed amount…

Q: What tools are available for solving adverse selection and moral hazard problems in debt contracts…

A: There may arise various problems like adverse selection and moral hazards problem in equity and debt…

Q: A contingent liability should be recorded in the financial statements when the:   Select one: a.…

A: Contingent liability is the liability that arises on an event may or may not happen. It is recorded…

Q: What is a Liability? Describe different types of Liability a company can have with examples.

A: A liability is a responsibility of a company happen due to a past incident done by the company. For…

Q: Under which circumnstances should a company disclose contingent liabilites in the footnotes of the…

A: Note: The answer for question first is given above. For remaining, please post separately. Thanks!…

Q: During a period of deflation in which liability account balance remains constant, which of the…

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Q: Which of the following is NOT a valid type of compensation for breach of contract? Select one: a.…

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Q: What makes product warranties considered as contingent liabilities? Also, what Generally Accepted…

A: Contingent Liability is a liabilty that may arise in outcome of future uncertain amount.

Q: Explain what is meant by adverse economic consequences of new or changed accounting standards.

A:

Q: director liability?

A: yes Directors square measure agents of the corporate in transactions they enter into on behalf of…

Q: Both financial and managerial accounting rely exclusively on GAAP for reporting. True False

A: Generally Accepted Accounting Principles (GAAP) are framed for uniformity in accounts. Different…

Q: The accounting assumption or principle of __________________ is being violated if a company that is…

A: The Full Disclosure Principle states that all relevant and necessary information must be included…

Q: What will the company record for bad debt expense?

A:

Q: A company can have a liability even if the amount of the obligation is unknown. O True O False

A: Liabilities are current obligations as a result of past transactions or events. Liabilities are…

Q: Suppose the analysis of a loss contingency indicates that an obligation is not probable. What…

A: Contingent Liability  Contingent liability is one form of liability that arises based on a…

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.