9.1 Distinguish among known, estimated, and contingent liabilities and provisions
1) The majority of a company's liabilities are estimated liabilities.
2) Notes payable would be an example of a known liability.
3) A contingent liability arises because of a past event, but is dependent upon a future event.
4) Which of the following would be considered an estimated liability?
A) Notes payable
B) Warranties payable
C) Pending litigation
D) Sales tax payable
E) Federal tax payable
5) Which of the following would be considered a known liability?
A) Federal income tax payable
B) Warranties payable
C) Pending litigation
D) Notes payable
E) Both federal income tax payable and notes payable
6) Which of the following would be considered a contingent liability?
A) Federal income tax payable
B) Warranties payable
C) Pending litigation
D) Contingency payable
E) Sales tax payable
7) An obligation resulting from an event that has not yet occurred is an example of a(n) __________.
8) A liability, such as warranties payable, would be an example of a(n) __________.
9) Accounts payable would be an example of a(n) __________.
10) Accrued liabilities, such as interest payable, would be considered a(n) __________.
11) Does the amount of an obligation need to be known in order for a liability to exist? Explain.