Contingent liability journal entry
This query is : Resolved
07 May 2020
Dear All, Pl help for below two questions..
1. Kindly provide the journal entry for contingent liability. Can it be shown in balance sheet or by way of notes to accounts only ?
2. If accruals entries (income and expenses) are not shown in books will it have any accounting impact ?
1. Kindly provide the journal entry for contingent liability. Can it be shown in balance sheet or by way of notes to accounts only ?
2. If accruals entries (income and expenses) are not shown in books will it have any accounting impact ?
07 May 2020
Contingent liabilities are not shown books , but same to be mentioned foot note in balance sheet.
08 May 2020
Thanks for the response. Can you please answer to my second question also..
If accruals entries (income and expenses) are not shown in books will it have any accounting impact ?
If accruals entries (income and expenses) are not shown in books will it have any accounting impact ?
08 May 2020
YES Contingent Liabilities (Which may or may not happen) needs to be explained in foot notes and all the accruals of liabilities needs to be given effect in Financial Statements. As per Accounting Standards all estimated liabilities and expenditures needs to be taken into accounting except for income.
09 May 2020
In mercantile system of accounting you have to book income and expenses year in which actually accrued.
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