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:

Stockholders

Individuals or entities that own shares in a corporation, giving them certain rights and responsibilities.

Fees Earned

Income earned by a company from its service offerings over a defined time frame.

Journal Entry

A record in accounting that notes the debit and credit movements across accounts for a particular financial transaction.

Account

A record in bookkeeping that tracks the financial transactions of a specific asset, liability, equity, revenue, or expense.