Which of the following is not a characteristic of an estimated liability?
A)The liability is known to exist.
B)The precise dollar amount cannot be determined until a later date.
C)The liability should not be recorded in the accounting records until future events have determined the exact amount.
D)The liability stems from past transactions.

Question

Quizplus · Accepted Answer

Estimated liabilities are recorded in the accounting records even if the exact amount is not known, based on the best available information. This is because the obligation is known to exist and relates to past transactions, making it necessary to account for it to provide a fair view of the financial position.

Which of the Following Is Not a Characteristic of an Estimated