Which of the following statements related to estimated liabilities is false? Multiple Choice O о They are always reported in the notes to financial statements. They include vacation benefits and paid absences. They can be both current and long term. They are known obligations of an uncertain amount that can be reasonably estimated. The journal entry to record estimated liabilities includes a debit to an expense account and credit to a payable account.
Bad Debts
At the end of the accounting period, a financial statement is prepared by every company, then at that time while preparing the financial statement, the company determines among its total receivable amount how much portion of receivables is collected by the company during that accounting period.
Accounts Receivable
The word “account receivable” means the payment is yet to be made for the work that is already done. Generally, each and every business sells its goods and services either in cash or in credit. So, when the goods are sold on credit account receivable arise which means the company is going to get the payment from its customer to whom the goods are sold on credit. Usually, the credit period may be for a very short period of time and in some rare cases it takes a year.
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