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Ludmilka [50]
3 years ago
10

Situation 1: A company offers a one-year warranty for the product that it manufactures. A history of warranty claims has been co

mpiled, and the probable amounts of claims related to sales for a given period can be determined. Situation 2: Subsequent to the date of a set of financial statements but prior to the issuance of the financial statements, a company enters into a contract that will probably result in a significant loss to the company. The amount of the loss can be reasonably estimated. Situation 3: A company has adopted a policy of recording self-insurance for any possible losses resulting from injury to others by the company’s vehicles. The premium for an insurance policy for the same risk from an independent insurance company would have an annual cost of $4,000. During the period covered by the financial statements, there were no accidents involving the company’s vehicles that resulted in injury to others. Discuss the accrual or type of disclosure necessary (if any) and the reason(s) why such disclosure is appropriate for each of the three independent sets of facts above.
Business
1 answer:
mr_godi [17]3 years ago
4 0

Answer:

Please find the detailed explanation below.

Situation 1 and 2 have disclosure while situation 3 does not require any disclosure.

Explanation:

Situation 1. Accrual. The one-year warranty has created what is known as contingent liability. Contingent liability is a type of liability that is dependent on the outcome of some specific actions which has happened in the past. The eventual liability may or may not happen. But since the probable claim from the one-year warranty has been determined, it should be disclosed. But if the claim cannot be determined, it shouldn't be disclosed.

Situation 2. Since this contract happened before the issuance of financial statement and the amount of loss from this contract can be reasonably estimated or determined, then it must be disclosed and the likely amount must also be disclosed. This disclosure will be under 'note to the financial statement'.

Situation 3. This is a self insurance and self insurance is not an insurance. There is no contingent liability in this situation. Also, there is no accident, no injury. Hence, this is no disclosure here.

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Management of a close corporation often resembles that of a______, but a corporation must meet the statutory requirements to rem
Reika [66]

Answer:

Explanation:

The statement in the question is not complete and should be the following with each of the answers provided being part of the statement like so,

Management of a close corporation often resembles that of a Partnership , but a corporation must meet the statutory requirements to remain a corporation. Often, shareholders in a close corporation restrict the transferability of shares. If a majority shareholder misappropriates company funds, the normal remedy for the other shareholders is to have their shares appraised to determine value and then receive that value.

8 0
3 years ago
The Federal Reserve's tools to control the money supply include open-market operations, the discount rate, and interest payments
leva [86]

Answer:

PART-1  

How should each instrument be changed if the Fed wishes to decrease the money supply?

The Fed would deportment open-market sales, increase the discount rate, and raise interest paid on reserves.

PART-2)  

Will the change affect the monetary base and/or the money multiplier?

The money multiplier refers to the capacity of money that financial institute like banks produce with each dollar of funds. Money base is exaggerated by the open-market processes and discount rate. Any alteration in interest expenditures on reserves modifies the money multiplier.

3 0
3 years ago
What is one reason that a hotel owner might consider hiring a hotel management company?
Allushta [10]

Improved hotel management effectiveness is one reason that a hotel owner might consider hiring a hotel management company.

      What function does a hotel management business serve?

  • The management firm oversees the hotel operations and makes sure they are profitable.
  • They are in charge of every aspect of the business, from hiring and training employees to procuring supplies, cleaning rooms, renting out meeting space, and entertaining visitors.
  • The General Manager is accountable to both the hotel management business AND the original owner who engaged the hotel management firm.
  • The general manager's job is to manage the hotel in a way that generates income for the owner.
  • To be clear, the hotel owner could be a person, a business, or a trust fund or real estate. These will change based on the market and the kind of hotel.

To learn more about  hotel management visit:brainly.com/question/10979252

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6 0
11 months ago
A firm has the following gross requirements for Item OF. Ordering costs are $60 per order and carrying costs are $0.50 per perio
aleksley [76]

Answer:

c. 120

Explanation:

The economic order quantity is the minimum amount of inventory that a seller must keep to demand and lower the holding cost. The formula for Economic order quantity is represented by the formula:

EOQ = \sqrt{\frac{2*Demand*Ordering Cost}{Holding cost} }

EOQ = \sqrt{\frac{2*240*60}{0.5} }

EOQ = 120

5 0
3 years ago
Banks work to earn a profit by selling financial services Group of answer choices True or false?
insens350 [35]

Answer:

True

Explanation:

Financial services are the activities rendered by any financial institution such as the banks to their customers. Most of the services are done at a fee that makes the main source of revenue for banks. The revenue is spent to pay the overall expenses of the bank. If the expenses are lower than the revenue, a bank makes profit. If expenses exceed revenue, a bank makes loss which is not mostly the case. Therefore, it is true to say that banks work to earn a profit by selling financial services.

5 0
3 years ago
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