If the Likelihood of a Future Event Is Probable and the Amount

question 188

Essay

If the likelihood of a future event is probable and the amount of the expense cannot be estimated,how should the company report the contingency?

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Definitions:

Accounts Payable Balance

The amount of money a company owes to its suppliers or creditors for goods and services purchased on credit.

Sales

The exchange of goods or services for money, representing the primary revenue source for most businesses.

COGS

Stands for Cost of Goods Sold; it's the direct cost attributable to the production of the goods sold by a company, including both raw materials and labor costs.

Compensating Balance

A minimum bank account balance a borrower must maintain as part of a loan agreement.