In order to be reported, liabilities must:
a. Be certain.
b. Sometimes be estimated.
c. Be for a specific amount.
d. Always have a definite date for payment.
e. Involve an outflow of cash.

Question

In order to be reported, liabilities must:
a. Be certain.
b. Sometimes be estimated.
c. Be for a specific amount.
d. Always have a definite date for payment.
e. Involve an outflow of cash.

Ariel · Accepted Answer

b. Sometimes be estimated.
Liabilities don't necessarily need to have a cash outflow, be a specific amount, on a specific date, or even be certain. In accounting, estimations are always used, for example, allowance for doubtful debts. In this case, an estimation of liability is known as a provisional/contingent liability. Thus option b is correct.

In order to be reported, liabilities must:

a. Be certain.

b. Sometimes be estimated.

c. Be for a specific amount.

d. Always have a definite date for payment.

e. Involve an outflow of cash.

Unlock this answer

Unlock this answer

In order to be reported, liabilities must: a. Be certain. b. Sometimes be estimated. c. Be for a specific amount. d. Always have a definite date for payment. e. Involve an outflow of cash.

Unlock this answer

Unlock this answer

In order to be reported, liabilities must:

a. Be certain.

b. Sometimes be estimated.

c. Be for a specific amount.

d. Always have a definite date for payment.

e. Involve an outflow of cash.