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does a cancellation of a service affect the companys balance sheet or book value?

Intermediate Accounting: Reporting And Analysis

3rd Edition

ISBN:9781337788281

Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach

Chapter9: Current Liabilities And Contingent Obligations

Section: Chapter Questions

Problem 19GI

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Question

does a cancellation of a service affect the companys balance sheet or book value?

Expert Solution

Step 1

Cancellation of service affect the company's balance sheet or book value :

Some of the contracts for example employment, affiliation, advertising, or sales contracts can be called intangible assets because they add value to a company.
An explanation is given below in step 2:

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