Final answer:
Option C, the signing of a three-year employment contract at a fixed annual salary, is NOT considered a liability as it is an agreement for future services rather than a present obligation. It contrasts with the other options, which all represent obligations that could constitute liabilities.
Step-by-step explanation:
The student is asking about liabilities, which are obligations that a company owes to outside parties. Liabilities are an essential part of a company's financial accounting and can take many forms.
Let's look at the options provided:
- A. An obligation that is estimated in amount is indeed a liability. It is common in business for some obligations to be uncertain in amount, but they are still recognized as liabilities.
- B. A note payable with no specified maturity date is also a liability because it represents a promise to pay money to another party.
- C. The signing of a three-year employment contract at a fixed annual salary is not typically classified as a liability because it is an agreement for future services, not an obligation that the company owes as of now.
- D. An obligation to provide goods or services in the future is a liability, often called unearned revenue or deferred revenue, where the company has received payment but has not yet delivered the goods or services.
Therefore, C is the correct answer: The signing of a three-year employment contract at a fixed annual salary would NOT be considered a liability on a company's balance sheet as it involves future work to be performed, rather than a present obligation to pay.