hey, see the attachment
Running head: INTERMEDIATE ACCOUNTING
Gain and Loss Contingencies
Identify the criteria used to account for and disclose gain and loss contingencies
Loss contingency may be referred to as a charge to expense to what is commonly referred
to as a probable future event. The contingency is responsible in giving the readers of a particular
organization’s financial statement. A contingent gain on the other hand is assets that are not
necessarily recorded in the books of account (Harrison, & Ng 2016). The widely used criteria
used to account for the contingencies is the reporting on the balance sheet and footnotes of the
organization’s financial statement.
Explain the accounting for different types of loss contingencies
The accounting of loss contingencies happens in a situation where the outcome is
uncertain, but there exists the possibility of a loss being created. The accounting is done to
recognize the losses that are probable. Additionally, the amount of loss is also reasonably
Describe the nature, type, and valuation of current liabilities
Current liabilities may be defined as the short term obligations listed in an organization’s
balance sheet and are due for settlement within one year. Types of current liabilities include
interest payable, bills payable, accrued expenses as well as short-term loans. Typically,
companies calculate the worth of liabilities at their present value of the future cash flows.
Current liabilities, as opposed to noncurrent liabilities, are short-term debts that are due for not
more than one year.
To begin with, it is essential to enquire what the money is needed for as this will form the
bases on whether to issue the loan or not. Secondly, the amount that is asked for is evaluated to
see if it’s reasonable and whether the current score of the business matches the amount asked for.
Additionally, a report on industry risks and that on the cash flow is done to be in a position to
evaluate the future of the bu...