Answer:
The answer is B.
Explanation:
Contingent liability is a liability that may occur in the future subject to the outcome of a specific event. The future outcome determines contingent liability. Examples of contingent liability are product warranties, pending court case etc.
So contingent liability should be recognized when the future events are probable to occur and the amount can be reasonably estimated
For example, a business might be willing to absorb lower profits and even losses in the present to strengthen its position and increase its market share so that it can earn higher profits in the future.
Answer:
The right choice is Option c (110.0%).
Explanation:
⇒
On estimating the values, we get
⇒ =
⇒ =
Note: percent = %
Answer:
B. debit to WIP inventory
Explanation:
The journal entry to record the usage of direct material in production is
Work in Process Inventory Dr.
To Raw Material Inventory
(Raw materials consumed recorded)
Raw material inventory is an asset. It's consumption should reduce it's balance. A debit increases an asset's balance while a credit reduces it's balance.
Work in process, like raw material is an inventory account i.e an asset. A debit increases their balance whereas a credit reduces it.
Here, raw materials i.e direct material have been issued for production, which would reduce their balance and increase the balance of work in process as finished goods are yet to be made.
Answer:
d. A cash budget is a forecasted statement that shows how a company's cash will be obtained and how it will be spent
Explanation:
A budget is a blueprint or a forecast which projects estimated future costs, revenues, income or other data. Actual information is later compared with budgeted information to ascertain the deviations and their causes and form conclusions.
A cash budget is a projected forecast of a company's cash inflows and outflows in future. A cash budget is a representation of budgeted future cash receipts and payments to determine the excess or deficit.
In case of deficit, it implies requirement of funds in future. The budget is also used to determine the sources from where the enterprise plans to raise such funds.