Survey Of Accounting
5th Edition
ISBN: 9781259631122
Author: Edmonds, Thomas P.
Publisher: Mcgraw-hill Education,
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Chapter 7, Problem 28P
a.
To determine
Provide an example for a
b.
To determine
Provide an example for a contingent liability that is reasonably possible or probable but not reasonably estimable and also explain the manner by which this type of contingent liability will be shown in the accounting records.
c.
To determine
Provide an example for a contingent liability that is remote and also explain the manner by which this type of contingent liability will be shown in the accounting records.
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Chapter 7 Solutions
Survey Of Accounting
Ch. 7 - 1. What type of transaction is a cash payment to...Ch. 7 - Prob. 2QCh. 7 - How does recording accrued interest affect the...Ch. 7 - 4. Who is the maker of a note payable?Ch. 7 - How does the going concern assumption discussed in...Ch. 7 - 6. Why is it necessary to make an adjusting entry...Ch. 7 - Assume that on October 1, 2018, Big Company...Ch. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - Prob. 10Q
Ch. 7 - 11. Are contingent liabilities recorded on a...Ch. 7 - Prob. 12QCh. 7 - Prob. 13QCh. 7 - Prob. 14QCh. 7 - Prob. 15QCh. 7 - Prob. 16QCh. 7 - 1. What is the difference between classification...Ch. 7 - 2. At the beginning of Year 1, B Co. has a note...Ch. 7 - 3. What is the purpose of a line of credit for a...Ch. 7 - 4. What are the primary sources of debt financing...Ch. 7 - 5. What are some advantages of issuing bonds...Ch. 7 - 6. What are some disadvantages of issuing bonds?Ch. 7 - 7. Why can a company usually issue bonds at a...Ch. 7 - 15. If Roc Co. issued 100,000 of 5 percent,...Ch. 7 - 16. What is the mechanism is used to adjust the...Ch. 7 - 17. When the effective interest rate is higher...Ch. 7 - 18. What type of transaction is the issuance of...Ch. 7 - 19. What factors may cause the effective interest...Ch. 7 - 20. If a bond is selling at 97, how much cash will...Ch. 7 - Prob. 30QCh. 7 - 22. Gay Co. has a balance m the Bonds Payable...Ch. 7 - Prob. 32QCh. 7 - Prob. 33QCh. 7 - Recognizing accrued interest expense Abardeen...Ch. 7 - Prob. 2ECh. 7 - Prob. 3ECh. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Effect of warranties on income and cash flow To...Ch. 7 - Effect of warranty obligations and payments on...Ch. 7 - Principle due at maturity versus installments...Ch. 7 - Prob. 9ECh. 7 - Amortization of a long-term loan A partial...Ch. 7 - Prob. 11ECh. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Prob. 14ECh. 7 - Exercise 7-15 Straight-line amortization of a bond...Ch. 7 - Prob. 16ECh. 7 - Prob. 17ECh. 7 - Prob. 18ECh. 7 - Prob. 19ECh. 7 - Prob. 20ECh. 7 - Prob. 21ECh. 7 - Exercise 7-22 Preparing a classified balance sheet...Ch. 7 - Exercise 7-23 Effective interest amortization of a...Ch. 7 - Prob. 24ECh. 7 - Prob. 25ECh. 7 - Prob. 26PCh. 7 - Prob. 27PCh. 7 - Prob. 28PCh. 7 - Problem 7-29 Current liabilities The following...Ch. 7 - Prob. 30PCh. 7 - Prob. 31PCh. 7 - Problem 7-32 Accounting for a line of credit Elite...Ch. 7 - Prob. 33PCh. 7 - Prob. 34PCh. 7 - Problem 7-35 Straight-line amortization of a bond...Ch. 7 - Prob. 36PCh. 7 - Prob. 37PCh. 7 - Prob. 38PCh. 7 - Writing Assignment Definition of elements of...Ch. 7 - Prob. 5ATC
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- Question 5 You are required to refer to the conceptual Framework and especially the two factors listed below and explain why future warranty costs should be recognised as a liability in the statement of financial position in the current period. Three elements that should be considered in your answer include the following: - Definition of various elements of the financial statements . - recognition criteria of various elements of the financial statements Note: Please do not redefine a liability in your answer. You are required to refer to the conceptual framework and discuss your answer by referring to the definition, recognition criteria. Question 6 You are required to refer to the Conceptual Framework and discuss whether GST payable should be treated as a revenue or liability in an entity’s account? You are required to refer to the following factors when providing your answer: - Definition of various elements of the financial statements - recognition criteria of various…arrow_forward34-Which of the following is NOT a contingent liability? a. Product warranty b. Pending law suit for property damage c. Pending law suit for slander d. Discounted note receivablearrow_forwardProblem 8: Distinguish between an actual liability and a contingent liability. Give an example of 3 different types of contingent liabilities and how they may exist in a company.arrow_forward
- 1. What are contingent liabilities and could you give some examples of contingent liabilities? Which two conditions have to be met in order to report a contingent liability on a balance sheet?arrow_forwardKnowledge Check 01 Which of the following describes the criteria that must be met for a contingent liability to be reported as a liability on the balance sheet?arrow_forwardWhen recognizing a contingent liability, if the future event is probable (likely) and the amount can be reasonably estimated, what are we required to do? A.Group of answer choices B.Do not record or disclose C.Record the liability D. Disclose in notes on financial statementsarrow_forward
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- 10. What is a liability? 11. What are the essential characteristics of a liability? 12. What is a current liability? 13. What is a noncurrent liability? 14. What are the elements comprising the equity?arrow_forwardA contingent liability should be recorded in the financial statements when the: Select one: a. Contingent event is probable and the amount can be reasonably estimated. b. Contingent event is probable regardless of whether the amount can be reasonably estimated c. Contingent event is reasonably possible or probable regardless of whether the amount can be reasonably estimated d. Contingent event is reasonably possible and the amount can be reasonably estimatedarrow_forwardTRUE OR FALSE 1. A liability can result from past, present or future eventsarrow_forward
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