PI 4 - Nesha Neycheva Accy 131 PI # 4 1. a. Give two...

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Nesha Neycheva Accy 131 PI # 4 1. a. Give two examples of Type I subsequent events A loss on an uncollectible trade account receivable as a result of a customer's failing financial condition leading to bankruptcy subsequent to the balance-sheet date would be indicative of conditions existing at the balance-sheet date, thereby calling for adjustment of the financial statements before their issuance. The settlement of litigation for an amount different from the liability recorded in the accounts would require adjustment of the financial statements if the events, such as personal injury or patent infringement that gave rise to the litigation had taken place prior to the balance-sheet date. b. Give two examples of Type II subsequent events Sale of a bond or capital stock issue. Purchase of a business. 2 a. Define contingent liabilities. These are possible liabilities, stemming from past events that will be resolved as to existence and amount by some future events. b.
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This note was uploaded on 05/04/2011 for the course ACCY 131 taught by Professor Ekanayake,c during the Spring '08 term at CSU Sacramento.

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PI 4 - Nesha Neycheva Accy 131 PI # 4 1. a. Give two...

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