Which statement is incorrect in the measurement of a provision? * a. The risks and uncertainties that inevitably surround many events and circumstances shall be taken into account in reaching the best estimate of a provision b. Where the effect of the time value of money is material, the amount of a provision shall be the present value of the expenditure expected to settle the obligation c. Future events that may affect the amount required to settle the obligation shall be reflected in the amount of the provision where there is sufficient objective evidence that the future events will occur d. Gains from expected disposal of assets shall be taken into account in measuring a provision

Q: A provision should be recognized when: O a. Present obligation from a past event, outflow that will…

A: Provision means an amount set side now to be payable in future because of some past event and…

Q: PROVIS A provision is an existing liability of uncertain timing uncertain amount. The essence of a…

A: Provision is an amount kept separately for some uncertain event that may happen in the future (Just…

Q: How should (i) a change in calculating the provision for doubtful accounts, and (ii) change in…

A: The provision for doubtful accounts is accounting estimates that change on a yearly basis. It is…

Q: Which of the following is not considered a characteristic of a liability? O Present obligation. O…

A: Liability means the amount which is to be paid to an outsider by business.  It is the present…

Q: Which of the following statements about contingent liabilities is incorrect? Group of answer choices…

A: A contingent liability is a potential liability that may arise in the future, such as unresolved…

Q: Which of the following statements is incorrect? O a. If the occurrence of the obligation is in…

A: A liability is present obligation, arising from past transaction, which probably has to be paid. If…

Q: Which of the following statement/s are incorrect? I. An enterprise should not recognize a contingent…

A: solution : Which of the following statement/s are incorrect? Answer : Only statement (iii) is…

Q: Which one of the following statement about encumbrance is correct? a. Encumbrances are equivalent to…

A: Encumbrances denote the estimated expenditures before the actual expenditure is occurred. It…

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: A. It is probable that an outflow of economic benefits will be required to settle an obligation B.…

A: Option D

Q: I. A provision is a present obligation which may either be legal or constructive. II. Even if a…

A: As per IFRS 37, A Provision is present obligation that arises from past event, in which outflow of…

Q: The Standard IAS 37 sets the criteria for recognition and measurement of Provisions; Contingent…

A: Contingent liabilities are those  possible obligations whose existence shall be confirmed by the…

Q: Determine if this shall result in recognition of liabilities 13. violation of the terms of a…

A: A liability is a obligation of entity which requires outflow of resources of entity for its…

Q: 6. A liability is recognized in the statement of comprehensive income when it is probable that an…

A: As per IASC framework, the liability is recognized in the financial statement when two conditions…

Q: Which of the following statements is true concerning contingent liabilities?     a. Such liabilities…

A: A contingent liability is a liability that may occur depending on the outcome of an uncertain future…

Q: An obligation that is contingent on the occurrence of a future event should be reported in the…

A: Financial statements: The financial statements refer to the combination of a various statements like…

Q: Which of the following modification of terms will not qualif, for derecognition of financial…

A: Solution Concept Derecognition of financial liability A financial liability is derecognized when the…

Q: A provision shall be recognized when except * it is probable that an outflow of resources embodying…

A: A provision is an account set off for any obligation which can occur in future. In other words, a…

Q: With reference to IAS 37, identify the correct statements from the following:  I.     A contingent…

A: Contingent Liabilities In simple term contingent liabilities means unexpected loss or expenses…

Q: What are the short-term effect and the long-term effect of improperly capitalizing expenditures on…

A: Financial statements are prepared by the company to present its financial position at a given point…

Q: Why is the distinction between a conditional and unconditional contribution important for accounting…

A: Step 1 The main difference between conditional and non-conditional contributions is that to…

Q: Determine if this shall result in recognition of liabilities 12. violation of the terms of a…

A: As per IAS 37 of IFRS Provisions, contingent liabilities and contingent assets A Provision is a…

Q: Under PFRS 15, when shall a consignor recognize revenue from its consignment sales?   When it is…

A: Performance obligation is satisfied when control is transferred Revenue shall be recognized with the…

Q: Which of the following does not require disclosure in the financial statements?   choices: There is…

A: Disclosure in Financial statement Disclosure in the financial statement which is described as…

Q: Which of the following is not an essential characteristic of a liabili O All are essential…

A: Liabilities are those present obligations that are due to business and they could be short-term in…

Q: The statement of financial position Select one: a. Makes very limited use of judgments and…

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

Q: Discuss, using practical example how revenue expenditure should not be capitalized?

A: SOLUTION- Thus, a revenue expenditure which increases the utility or productive capacity of an…

Q: Pursuant to the conceptual framework, for an item to be characterised as a liability the definition…

A: Two Examples of Liabilities: 1) Trade payables: Satisfy all the three essential characteristics of…

Q: All of Definitions of the financial failure confirm the project's inability to pay it current and…

A: solution concept financial failure                 Financial failure refer to the situation where…

Q: What are the audit procedures used to identify contingent liabilities?

A:

Q: Short-term obligations are reported as noncurrent

A: Short-term obligations are liabilities to be settled within one accounting year.

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: A provision is an existing liability of uncertain timing and uncertain amount True False

A: Introduction:- Provisions express funds put separately by a company to cover anticipated losses in…

Q: The disclosure of a line item for Other current assets in the Statement of financial position would…

A: The answer for the multiple choice question and relevant explanation are presented hereunder : Other…

Q: Application of the full disclosure principle _____________.   a.requires that the financial…

A: Accounting principles are those rules and guidelines which are used by the accountants in completing…

Q: What is/are the rule/rules (and the exceptions, if there be any) in case an object is lost or…

A: Fortuitous events are the events that are considered as the "act of God" because naturally, the act…

Q: _____ are the entity’s present obligations arising from past events, the settlement of which is…

A: Solution: Liabilities are the entity’s present obligations arising from past events, the settlement…

Q: I. A provision is a present obligation which may either be legal or constructive. II. Even if a…

A: As per IAS 37 Provisions, Contingent Liabilities and Contingent Assets, A provision is a present…

Q: Under PFRS 15, what is the measurement basis of revenue from contracts with customers? Select the…

A: Revenue recognizes steps: Identify the contract with a customer Identify the performance…

Q: Which of the following statements is false? Select one: a. A contingent liability should be…

A: A contingent liability is a liability which may occur in the future due to some circumstances not…

Q: Under PFRS 15, what is the measurement of consignment sales revenue? a. realizable value of…

A: Consignment revenue: Consignment is a trade  contract   where  goods are left   in the custody  of…

Q: Which of the following statement/s are incorrect? I. An enterprise should not recognize a contingent…

A: Solution: Following statements are correct: 1. An enterprise should not recognize a  contingent…

Q: The issues that the FASB and IASB must address in developing a conceptual framework include all of…

A: FASB Financial Accounting Standard Board and IASB international Accounting Standard Board are the…

Q: True (t) or False (f) _____ Contingent liabilities should be recorded in the accounts if there is a…

A: The contingent liability represents the obligation that arise in the organization due to its past…

Q: Which of these statements is true?      a. The matching concept requires that we distinguish between…

A: The matching principle is an accounting principle that states that the expenses and revenue of a…

Q: With reference to IAS 37, identify the correct statements from the following: I A contingent asset…

A: Contingent assets refer to the assets that are a result of past event and inflow from those assets…

Q: 14 Risk related to counterparty failure to meet their obligation based on the initially agreed terms…

A: Counterparty risk is the possibility or likelihood that one of the parties to a transaction could…

Q: Explain the mind the relation between the recognition of deferred revenue associated with advance…

A: Deferrals: Deferrals refer to “Transactions, events, or arrangements” where in the cash flows are…

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.