All of the following statements related to estimated liabilities are true except:
A)Are a known obligation of an uncertain amount that can be reasonably estimated.
B)Include vacation benefits or paid absences.
C)Depends on the likelihood that a future event will occur.
D)Entry to record includes a debit to an expense account and credit to a payable account.
E)Can be both current and long term.

Question

Quizplus · Accepted Answer

Estimated liabilities are obligations whose amount or timing is uncertain but can be reasonably estimated, not directly dependent on the likelihood of a future event occurring. They include obligations like vacation benefits and can be recorded as both current and long-term, with the typical journal entry involving a debit to an expense account and a credit to a payable account.

All of the Following Statements Related to Estimated Liabilities Are