- This topic has 5 replies, 5 voices, and was last updated 13 years ago by
.
-
Posts
-
QUESTION 30
During the year an ex-employee of Dongle, a limited company made a claim against the
company for unfair dismissal. Legal advisors believe that the claim will be successful and
have estimated that the cost of the claim will approximately to $12,565.
What adjustment (if any) would be required to account for the claim?
A CR income statement DR statement of financial position
B DR Income statement CR statement of financial position
C No adjustment necessary
D No adjustment necessary but a disclosure note requiredyou would need to provide accrual for it – Dr exepnses income statement and Cr BS
@pannanikt shouldn’t it be provide a provision instead of accrual
- Topics: 0
- Replies: 15
- ☆
yes it should be a provision because the event is more likely to happen than not, its a liability of uncertain timing or amount not an accrual, because its existence is not yet confirmed 1s confirmed it will be charged for the time being it will be an estimated provision
- You must be logged in to reply to this topic.