The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening. To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

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Answer 1

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Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

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Huprey Co. is the defendant in the following legal claims. For each of the following claims, indicatewhether Huprey should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. Huprey can reasonably estimate that a pending lawsuit will result in damages of $1,250,000. It is probable that Huprey will lose the case.

AXE Co. is the defendant in a lawsuit. AXE reasonably estimates that this pending lawsuit will result in damages of $99,000. It is probable that AXE will lose the case. What should AXE do? a. Record a liability c. Have no disclosure b. Disclose in notes

Huprey Co. is the defendant in the following legal claims. For each of the following claims, indicatewhether Huprey should (a) record a liability, (b) disclose in notes, or (c) have no disclosure. It is reasonably possible that Huprey will lose a pending lawsuit. The loss cannot be estimated.

Answer 2

Question

Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

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Answer 3

Question

Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

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Answer 4

Question

Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

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Answer 5

Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

Answer 6

Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

Answer 7

Chapter 9, Problem 10QS

1

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose a liability or (c) have no disclosure.

Answer 8

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

Answer 9

2

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

Answer 10

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

Answer 11

3

Summary Introduction

Introduction:The liabilities of a business which is either uncertain or the amount of which is not estimated correctly are contingencies. A liability is recorded when there is certainty of it happening with the amount of loss. A contingency is disclosed in notes when either happening of liability is not certain or either the amount of loss is not estimated. A contingency is not recorded when there is no possibility of it happening.

To determine: The option that H will choose for the given case. Options are (a) record a liability (b) disclose in notes or (c) have no disclosure.

Answer 12

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Answer 13

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Answer 14

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Answer 15

Ch. 9 - Prob. 1DQ Ch. 9 - Prob. 2DQ Ch. 9 - Prob. 3DQ Ch. 9 - What is the combined amount (in percent) of the...Ch. 9 - What is the current Medicare tax rate? This rate...Ch. 9 - Prob. 6DQ Ch. 9 - Prob. 7DQ Ch. 9 - Prob. 8DQ Ch. 9 - Why are warranty liabilities usually recognized on...Ch. 9 - Prob. 10DQ

Solution Summary: The author explains that a contingency is recorded when there is certainty of it happening with the amount of loss.

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