on the 2007 financial statements dated December 31? 49) A contingency
can be accrued when 50) Mark Ward is a farmer who owns land which
borders on the right-of-way of the Northern Railroad. On August 10,
2007, due to the admitted negligence of the Railroad, hay on the farm
was set on fire and burned. Ward had had a dispute with the Railroad for
several years concerning the ownership of a small parcel of land. The
representative of the Railroad has offered to assign any rights which the
Railroad may have in the land to Ward in exchange for a release of his
right to reimbursement for the loss he has sustained from the fire. Ward
appears inclined to accept the Railroad's offer. The Railroad's 2007
financial statements should include the following related to the incident:
51) Which of the following sets of conditions would give rise to the
accrual of a contingency under current generally accepted accounting
principles? 52) If bonds are issued initially at a premium and the
effective-interest method of amortization is used, interest expense in the
earlier years will be 53) An example of an item which is NOT a liability
is 54) The covenants and other terms of the agreement between the
issuer of bonds and the lender are set forth in the 55) Which of the
following is a correct statement of one of the capitalization criteria? 56)
Which of the following best describes current practice in accounting for
leases? 57) While only certain leases are currently accounted for as a
sale or purchase, there is theoretic justification for considering all leases
to be sales or purchases. The principal reason that supports this idea is
that 58) The amount to be recorded as the cost of an asset under capital
lease is equal