Financial Accounting
Financial Accounting
10th Edition
ISBN: 9781119298229
Author: Weygandt, Jerry J.; Kieso, Donald E.; Kimmel, Paul D.
Publisher: WILEY
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Question
Chapter K, Problem 1Q
To determine

Other significant liabilities

Other significant liabilities are liabilities other than current and long-term liabilities. These liabilities have a significant impact on the future cash flows and financial position of the company. Contingent liabilities, lease liabilities and additional liabilities for employee fringe benefits are the examples of other significant liabilities.

To Describe: The contingent liability with an example.

Expert Solution & Answer
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Explanation of Solution

The contingent liability is not treated as a liability of the company on the date of the balance sheet but it may become liabilities in the future date on the happening of an ambiguous event. Warranty liability is an example of contingent liability.

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