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 warranty b) Unearned revenue c) GST payable d) Allowance for doubtful debts e) A disputable lawsuit

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 warranty b) Unearned revenue c) GST payable d) Allowance for doubtful debts e) A disputable lawsuit

Principles of Accounting Volume 1

19th Edition

ISBN:9781947172685

Author:OpenStax

Publisher:OpenStax

Chapter12: Current Liabilities

Section: Chapter Questions

Problem 10MC: What accounts are used to record a contingent warranty liability that is probable and estimable but...

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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
What accounts are used to record a contingent warranty liability that is probable and estimable buthas yet to be fulfilled?A. warranty liability and cashB. warranty expense and cashC. warranty liability and warranty expense, cashD. warranty expense and warranty liability
The Standard IAS 37 sets the criteria for recognition and measurement of Provisions; Contingent liabilities and Contingent assets; and requires several disclosures about these items to understand them better. Where do you find contingent liabilities in the financial statements? a.Notes to Accounts b.None of the options c.Current Liabilities d.Non-current Liabilities
Which of the following statements is false?a. A contingent liability should be disclosed in the notes to the financial statements if thereis a reasonable possibility that a loss (or expense) will occur.b. All contingent liabilities should be reported as liabilities on the financial statements,even those that are unlikely to occur.c. A contingent liability is a potential obligation that depends on the future outcome of pastevents.d. A contingent liability should be accrued if the loss is probable and the amount of theloss can be reasonably estimated.
Which of the following statements is false?Select one:a. A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense) will occur.b. A contingent liability should be accrued if the loss is probable and the amount of the loss can be reasonably estimated.c. A contingent liability is a potential obligation that depends on the future outcome of past events.d. All contingent liabilities should be reported as liabilities on the financial statements, even those that are unlikely to occur.
Which 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.
If problem is silent as to the terms of a Warranty Payable, will it be presented in the current liabilities, or the non-current liabilities section of the balance sheet?
what accounts are used to record a contingent warranty liability that is probable and estimable but has yet to be fulfilled
When should a contingent liability be recognized and reported on the financial statements? A. Reporting contingent liabilities do not require they be probable or reasonably estimated B. When the contingent liability is probable C. When a reasonable estimation can be made of the amount owed D. When the contingent liability is probable and a reasonable estimation can be made of the amount owed
What accounting concept is reflected in recognizing warranty liabilities as liabilities even when they are uncertain?
Contingent liabilities that are classified as reasonably possible or probable must each be footnoted in the notes to the financial statements. True or False.
TRUE OR FALSE? (Based on the book.)The effect of a lender agreeing to give the borrowing entity a grace period within the reporting period will make a liability noncurrent.