The following questions are independent of each other. a. A warranty is like a contingent liability in

Question:

The following questions are independent of each other.
a. A warranty is like a contingent liability in that the amount to be paid is not known at year end. Why are warranties payable shown as a current liability, whereas are often reported in the notes to the financial statements?
b. A friend comments that he thought that liabilities represented amounts owed by a company. He asks why unearned revenues are shown as a current liability. How would you respond?
c. Auditors have procedures for determining whether they have discovered all of a company's often called "a search for unrecorded liabilities." These procedures differ from the procedures used for determining that are stated correctly. How would an auditor identify a client's ?
Contingent liabilities
A contingent liability is an obligation of business related to an uncertain future event. The business must record it in its financial statements if the amount can be reliably estimated and it is probable that amount will be paid by business as a... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive...