Question

An estimated liability: Multiple Choice Is an unknown liability of a certain amount. Is a known obligation of an uncertain amount that can be reasonably estimated. Is a liability that may occur if a future event occurs. Can be the result of a lawsuit. Is not recorded until the amount is known for certain.

Answer 1

Is a known obligation of an uncertain amount that can be reasonably estimated

Step-by-step explanation:

A liability is a present obligation of an entity as a result of a past event, for which economic resources are expected to flow out of the entity.

As such, an estimated liability is a present and known obligation of an entity. The amount of such liability is uncertain but can be reliably estimated.

A good example of such liability is accrued expenses.

Answer 2

Is a known obligation of an uncertain amount of money that can be reasonably estimated.

Step-by-step explanation:

A liability can be defined as the amount of money owed by an organization. Liabilities could include loans, mortgages. Some liabilities occur as a result of the amount of expenses incurred in carrying out different projects such as expansion of the organisation.

An estimated liability can be defined as a debt in which the management of an organization is fully aware of, the exact amount of such debts is not known. This type of liability have an indefinite due date and amount.