Which should be disclosed in the financial statements

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Reference no: EM132781386

problem 1. Which of the following should be disclosed in the financial statements as contingent liability?

a. The entity has accepted liability prior to year-end for unfair dismissal of an employee and is to pay damages.

b. The entity has received a letter from a supplier complaining about an old unpaid invoice.

c. The entity is involved in a legal; case which it may possibly lose, although this is not probable.

d. The entity has not yet paid claims under sales warranties.

problem 2. A retail store received cash and issued a gift certificate that is redeemable in merchandise. When the gift certificate was issued, a

a. Deferred revenue account should be decrease

b. Deferred revenue account should be increase

c. Revenue account should be decreased

d. Revenue account should be increase

Reference no: EM132781386

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