Author Question: What are definitely determinable liabilities and estimated liabilities? What will be an ideal ... (Read 69 times)

CharlieWard · **on:** Jul 5, 2018

What are definitely determinable liabilities and estimated liabilities?

What will be an ideal response?

Question 2

The employer pays which of the following to the Internal Revenue Service?
a. the employer's Social Security and Medicare taxes
b. sales taxes
c. property taxes
d. no taxes

Joc · **Reply #1 on:** Jul 5, 2018

Answer to Question 1

Definitely determinable liabilities are liabilities of a known amount. For example, if an organization borrows 50,000 from a bank at 8 interest, both the principal and the interest that accrues can be measured exactly, so they are definitely determinable debts. Estimated liabilities, on the other hand, are definitely debts, but the exact amount is unknown. The classic example of an estimated liability is a warranty issued to customers when goods or services are sold. It is unknown how much, if any, of the promises will have to be satisfied at a later date.

Answer to Question 2

a