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CONTINGENCIES VS. ACCRUALS
a) Define contingencies versus accruals, recognizing the attributes they share but focusing on how they also differ. Include references to their economic significance, the basis or criteria for establishing them, and other info to characterize and differentiate the two.
b) Describe the reporting to include the areas of the balance sheet reflecting them and the recording of costs associated with them in the income statement.
c) Provide examples or "cases" for clarity, as needed.
Cite appropriate Accounting Standards Codification (ASC) authority in your discussion to support your position and enhance the discussion with example cases.
laramie industries owns 45 of mccook company. for the current year mccook reports net income of 250000 and declares and
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Mountain Springs Inc. bottles and distributes springwater. On May 2 of the current yer, Mountain Springs re acquired 3,000 shares of its common stock at $72 per share.
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