Chapter 13 - Test Bank 190 - 127 What is the point of the...

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127. What is the point of the last paragraph of the Goodday disclosure? Explain in terms of authoritative GAAP. GAAP regarding accounting for contingencies indicates that outcomes of contingent losses that are remote (i.e., less than reasonably possible) need not be accrued or disclosed in the financial statements and footnotes. This is a catchall statement by the company that any other possible losses not disclosed are excluded because of the remote probability assessed. AACSB: Reflective Thinking AICPA FN: Measurement Blooms: Understand Difficulty: 2 Medium Learning Objective: 13-05 Identify situations that constitute contingencies and the circumstances under which they should be
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Unformatted text preview: accrued. Topic: Identify contingencies 128. Show the summary journal entry that Goodday recorded for the environmental cleanup and product liability/tort claim matters, described in the footnote disclosure. AACSB: Analytic Blooms: Apply Difficulty: 3 Hard Learning Objective: 13-06 Demonstrate the appropriate accounting treatment for contingencies; including unasserted claims and assessments. Topic: Accounting for contingencies...
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  • Winter '11
  • Shirey
  • Psychology, AACSB, AICPA FN

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