Question

Match the following terms to the appropriate definition (or partial definition). Each definition is used once."Definltlon (or Partial Definition)in A contractual obligation to carry out a transaction at specified terms in the future.ontingent Material commitments should be disclosed in the financial statements.liabilityeneral risk A possible liability, stemming from past events, that will be resolved as to existence andontingency. Iron curtain -mount by some future event.- pproach- Known 3. A possible loss, stemming from past events, that will be resolved as to existence andmisstatementsLikely - mount by some future event.misstatements' Loss . A n approach to making materiality judgments that quantifies the total likely misstateontingencyh. Rollover ment as of the current year-end based on the effects of reflecting all misstatements- pproachincluding projecting misstatements where appropriate) existing in the balance sheet at. the end of theurrent year, irrespective of whether the misstatements occurred in the current year or previous years.

Answer 1

Answer:

Please see explanation

Explanation:

1. Commitment : A contractual obligation to carry out a transaction at specified terms in the future. Material commitments should be disclosed in the financial statement.

2. Contingent liability: a possible liability stemming from past events, that would be resolved as to the existence and amount by some future event.

3. General risk contingency: An element of the business environment that involves some risk of a future loss. Examples include the risk of accident, strike, price fluctuations, or natural catastrophe. General risk contingencies should not be disclosed in financial statements.

4. Iron curtain approach: An approach to making materiality judgments that quantifies the total likely misstatement as of the current year-end based on the effects of reflecting all misstatements (including projecting misstatements where appropriate) existing in the balance sheet at the end of the current year.

5. Known misstatements: Specific misstatements identified by the auditor during the course of the audit.

6. Likely misstatements: Misstatements identified by the auditor during the course of the audit that are due to either extrapolation from audit evidence or differences in accounting estimates.

7. Loss contingency: A possible loss, stemming from past events that will be resolved as to the existence and amount by some future event.

8. Rollover approach: An element of the business environment that involves some risk of a future loss.