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Which of the following is not a contingentliability?
- a)Claim against enterprises not acknowledged as debt
- b)Guarantee given in respect of third parties
- c)Liability in respect of bills discounted
- d)Penalty imposed by excise officer for violation of provisions of Central Excise Act
Correct answer is option 'D'. Can you explain this answer?
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Most Upvoted Answer
Which of the following is not a contingentliability?a)Claim against en...
Contingent liabilities are potential obligations that may or may not arise, depending on the occurrence or non-occurrence of one or more uncertain future events. They are typically disclosed in the notes to the financial statements. The options given in the question are all examples of contingent liabilities except for option D.
Penalty imposed by excise officer for violation of provisions of Central Excise Act is not a contingent liability because it is a current liability that has already arisen due to a past event (violation of provisions of Central Excise Act). Therefore, it should be recognized as an expense in the income statement and as a liability in the balance sheet.
To further explain the other options:
a) Claim against enterprises not acknowledged as debt: This is a contingent liability because it is a potential obligation that may arise if the enterprise is found liable in a legal proceeding.
b) Guarantee given in respect of third parties: This is a contingent liability because it is a potential obligation that may arise if the third party defaults on its obligation and the enterprise is required to fulfill the guarantee.
c) Liability in respect of bills discounted: This is a contingent liability because it is a potential obligation that may arise if the bills are not paid by the parties liable to pay them.
In conclusion, it is important for entities to identify and disclose contingent liabilities in their financial statements to provide users with a better understanding of the potential risks and obligations that may affect their financial position.
Penalty imposed by excise officer for violation of provisions of Central Excise Act is not a contingent liability because it is a current liability that has already arisen due to a past event (violation of provisions of Central Excise Act). Therefore, it should be recognized as an expense in the income statement and as a liability in the balance sheet.
To further explain the other options:
a) Claim against enterprises not acknowledged as debt: This is a contingent liability because it is a potential obligation that may arise if the enterprise is found liable in a legal proceeding.
b) Guarantee given in respect of third parties: This is a contingent liability because it is a potential obligation that may arise if the third party defaults on its obligation and the enterprise is required to fulfill the guarantee.
c) Liability in respect of bills discounted: This is a contingent liability because it is a potential obligation that may arise if the bills are not paid by the parties liable to pay them.
In conclusion, it is important for entities to identify and disclose contingent liabilities in their financial statements to provide users with a better understanding of the potential risks and obligations that may affect their financial position.
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Which of the following is not a contingentliability?a)Claim against en...
Option C is correct bcoz penalty imposed is a liability to us and not a contingent liability. The penalty should be paid one day or another by our firm and it can't be escaped. If the penalty issue is challenged by us and it is in the court case then it is called a contingent liability.
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Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer?
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Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer?.
Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer?.
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Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer?, a detailed solution for Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer? has been provided alongside types of Which of the following is not a contingentliability?a)Claim against enterprises not acknowledged as debtb)Guarantee given in respect of third partiesc)Liability in respect of bills discountedd)Penalty imposed by excise officer for violation of provisions of Central Excise ActCorrect answer is option 'D'. Can you explain this answer? theory, EduRev gives you an
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