Chapter 11, Problem 6QC

To determine

Liability: A Liability is a financial debt or obligation which arises due to some events that have occured in the past. These liabilities result in outflow of any asset or provision of any goods or services. Liabilities can be known or contingent. Known liabilities are debts, the occurrence of which is known in advance. Example: Payroll taxes, note payable, etc. These liabilities generally arise as a result of contracts, agreements, or laws.

To Determine:

The accounting treatment with regard to known liabilities of estimated amounts