LSU ACCT 3222 - Chapter 14 Final Exam – Questions – With Complete Solutions
an existing condition or situation involving uncertainty as to possible loss that will ultimately be resolved when one or more future events occur or fail to occur correct answer: loss contingency 3 categories of the likelihood of loss correct answer: 1. Probably 2. Reasonably possible 3. Remote What is the accounting treatment for loss contingencies if probable and reasonably estimated? correct answer: record an adjusting entry to accrue the loss and disclose in FS notes What is the accounting treatment for loss contingencies if reasonably possible (50/50 chance)? correct answer: disclose only What is the accounting treatment for loss contingencies if remote? correct answer: do nothing (usually still do a blanket disclosure in notes) What is the strongest audit procedure for contingent liabilities? And what assertion does it cover? When is it sent? correct answer: obtain legal letter - the existence of uncertainties arising from litigation, claims, and assessments
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Louisiana State University
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ACCT 3222
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lsu acct 3222 chapter 14 final exam – questions – with complete solutions
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