Obligations that may arise from past transactions only if certain events occur in the future are contingent liabilities. Question 5 options: True
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- What are Contingent Liabilities? Give an example. What are the factors that determine the reason for Contingent Liabilities?Which of the following is a characteristic of a current liability? A. It is an avoidable obligation. B. It occurs because of a future transaction or event. C. It cannot be settled with services. D. It creates a present obligation for future payment of cash or services.How are the terms “probable,” “reasonably possible,”and “remote” related to contingent liabilities?
- An obligation that is contingent on the occurrence of a future event should be reported in the statement of financial position as a liability if: a. The amount of the obligation can be reasonably estimated. b. The future event is likely to occur. c. The occurrence of the future event is at least reasonably possible and the amount is known d. The occurrence of the future event is probable and the amount can be reasonably estimated.Can you please describe contingent liabilities and how to account for and/or report them.When the debtor binds himself to pay when his means permit him to do so, the obligation is: a pure obligation an obligation with a suspensive condition an obligation with a resolutory condition an obligation with a suspensive period
- What are the three elements of the definition for liabilities? List from the following items that are classified as liabilities and explain why, or why not, they are classified as liabilities:a) Provision for warrantyb) Unearned revenuec) GST payabled) Allowance for doubtful debtse) A disputable lawsuit looking for expert's opinionWhich of the following statements is true concerning contingent liabilities? a. Such liabilities should include obligations of known existence but of unknown amount. b. If the definite amount is involved, it is not a contingent liability. c. Such liabilities are generally reported and totaled with other liabilities to make up the liability section of most balance sheets. d. Such liabilities should include obligations known in amount but unknown in existence.The following obligations are immediately demandable, EXCEPT: a pure obligation obligation with a resolutory condition obligation with a resolutory period none of the above