Answered: 18. Which of the following loss…

18. Which of the following loss contingencies is not usually accrued? a. product warranty obligations b. premium offer obligations c. risk of loss from fire d. noncollectibility of receivables

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

Chapter13: Auditing Debt, Equity, And Long-term Liabilities Requiring Management Estimates

Section: Chapter Questions

Problem 7CYBK

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Concept explainers

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.

Question

18. Which of the following loss contingencies is not usually accrued?

a. product warranty obligations
b. premium offer obligations
c. risk of loss from fire
d. noncollectibility of receivables

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Accounting for Current liabilities, Provisions and Contingencies

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