An estimated liability: A) Is an unknown liability of a certain amount. B) Is a known obligation of an uncertain amount that can be reasonably estimated. C) Is a liability that may occur if a future event occurs. D) Can be the result of a lawsuit. E) Is not recorded until the amount is known for certain. Note:-

An estimated liability: A) Is an unknown liability of a certain amount. B) Is a known obligation of an uncertain amount that can be reasonably estimated. C) Is a liability that may occur if a future event occurs. D) Can be the result of a lawsuit. E) Is not recorded until the amount is known for certain. Note:-

Auditing: A Risk Based-Approach (MindTap Course List)

11th Edition

ISBN:9781337619455

Author:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Publisher:Karla M Johnstone, Audrey A. Gramling, Larry E. Rittenberg

Chapter4: Professional Legal Liability

Section: Chapter Questions

Problem 11CYBK

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6. Which of the following statements is true?a. No loss contingencies should be disclosed if there is just a reasonable possibility of a loss.b. Indirect guarantees should normally be accrued.c. Losses may be accrued for unasserted claims and other potential unfiled lawsuits.d. In the case of loss contingencies, accrual can be made even if the exact payee and payment date are not
Which of the following statements about contingent liabilities is incorrect? Group of answer choices A)A disclosure note is required when the loss is reasonably possible and the amount cannot be reasonably estimated. B)A disclosure note is required when the loss is probable and the amount can be reasonably estimated. C)A disclosure note is required when the loss is reasonably possible and the amount can be reasonably estimated. D)A disclosure note is required when the loss is remote and the amount can be accurately estimated. E)All of the above statements are correct.
Which of the following statements is false?Select one:a. A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense) will occur.b. A contingent liability should be accrued if the loss is probable and the amount of the loss can be reasonably estimated.c. A contingent liability is a potential obligation that depends on the future outcome of past events.d. All contingent liabilities should be reported as liabilities on the financial statements, even those that are unlikely to occur.
Which of the following statements is false?a. A contingent liability should be disclosed in the notes to the financial statements if thereis a reasonable possibility that a loss (or expense) will occur.b. All contingent liabilities should be reported as liabilities on the financial statements,even those that are unlikely to occur.c. A contingent liability is a potential obligation that depends on the future outcome of pastevents.d. A contingent liability should be accrued if the loss is probable and the amount of theloss can be reasonably estimated.
Which of the following statements is incorrect? O a. If the occurrence of the obligation is in doubt, there is no need to account for the liability. O b. A liability is a present obligation, arising from past transaction, which probably has to be paid. O c. Damages awarded by court against the business may be ignored because it will be appealed. O d. A liability has to be accounted for at the best reliable estimate even if the amount is not certain.
Contrast the liability issues and disclosure of errors. Does disclosure minimize the risk? Does the disclosure improve avoidable events?
4. Which of the following is true of a contingent liability? OIt is a potential liability that depends on a future event. OIt is an actual liability that is difficult to estimate. OIt is an actual liability that depends on a past event. OIt is a court-imposed liability based on an officer's fraud as decided in a completed lawsuit.
The drawee of a check is not liable on the instrument until the check is _______. a.) Accepted. b.) Rejected. c.) Dishonored. d.) Presented.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely.
TRUE OR FALSE An instrument payable out of a contingency is not negotiable even if the contingency happened. The drawee in a promissory note must be named or otherwise indicated therein with reasonable certainty. An endorsement cannot be stricken out. A person who signed an instrument without indicating in what capacity he signs shall be considered an endorser. The defense that the instrument is undelivered and was completed without authority is a real defense.
According to FASB, when should a company journalize a contingent liability? A. Do not journalize the contingent liability under any circumstances. B. Journalize the contingent liability, even though you will probably win the lawsuit. C. Journalize the contingent liability only if the amount can be estimated and the probability of loss is reasonably possible. D. Journalize the contingent liability if it is probable that the loss will occur, and the amount of the loss can be reasonably estimated. thanks for help appareciated it rajtir h
Please explain your answer...and please do not give plagiarized answer.