Question

Which of the following would be considered an estimated liability?

A. Sales tax payable

B. Pending litigation

C. Notes payable

D. Warranties payable

Answer 1

An estimated liability refers to a debt or obligation that a company expects to pay in the future. Sales tax payable, pending litigation, and warranties payable would be considered estimated liabilities.

Step-by-step explanation:

An estimated liability refers to a debt or obligation that a company expects to pay in the future. Based on the options provided, sales tax payable, pending litigation, and warranties payable would be considered estimated liabilities.

Sales tax payable is a liability that arises from collecting sales tax from customers but has not yet been remitted to the government.

Pending litigation represents potential legal claims or lawsuits filed against the company that may result in an obligation to pay damages or settlements.

Warranties payable are liabilities associated with product warranties and represent the estimated costs that a company expects to incur in fulfilling warranty obligations.