ACC 541 Week 4 DQ 1

# ACC 541 Week 4 DQ 1

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Asked by 2 years ago
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Week 4 - DQ 1

Discuss contingencies and how they are reported on financial statements. What conditions must be met before a contingency can be charged against income?

Response #1

A contingent event is one that is doubtful to occur. A few examples of contingent events in regards to the financial aspects of a company is: uncollectible accounts, estimated liabilities for warranties, estimated losses on lawsuits, and estimated looses related to pollution cause by company operations.

According to SFAS No. 5, only contingencies in which the possible future event may indicate an asset is impaired or a liability has been incurred on the balance sheet date are candidates for accrual or disclosure.

An estimated loss from a loss contingency should be charged to income if the information available...

ACC 541
hellothereson

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Excerpt from file: Week 4 DQ 1 Discuss contingencies and how they are reported on financial statements. What conditions must be met before a contingency can be charged against income? Response #1 A contingent event is one that is doubtful to occur. A few examples of contingent events in regards to the financial

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