In Accordance with AASB 137 "Provisions,Contingent Liabilities and Contingent Assets",which

question 27

Multiple Choice

In accordance with AASB 137 "Provisions,Contingent Liabilities and Contingent Assets",which of the following is considered a contingent liability?

• A) Guarantee provided by the parent entity on behalf of a solvent subsidiary.
• B) Settlement of a legal case where the company is likely to be held liable for damages in court.
• C) Best estimate of likely claims for warranty by customers.
• D) Guarantee of an associate's bank overdraft where the associate has declared bankruptcy.
• E) None of the given answers.

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Definitions:

Division of Profits

The allocation of a company's net profits among its shareholders or partners.

Partnership Business

A type of business structure in which two or more individuals share ownership, profits, liabilities, and responsibilities.

Compete

To engage in an effort to win or achieve something, such as a market or a contest, often against others.

Consent

Agreement, approval, or permission as to some act or purpose, given voluntarily by a competent individual.