Classify Each of the Following Items as Either

question 27

Short Answer

Classify each of the following items as either:
A. Estimated liability
B. Contingent liability
C. Known liability
1. Lawsuit against the company
2. Warranty on products sold this year
3. Accounts payable
4. Income taxes payable
5. Vacation benefits
6. Accrued wages payable
7. Debt guarantees
8. Sales taxes payable
9. Payroll taxes payable
10. Unearned revenues

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Definitions:

IRS Method

A term not specifically defined but often refers to the procedures, formulas, or rules established by the IRS for calculating taxes, deductions, and credits.

Royalty Income

Income derived from the use of an individual's property, such as patents, copyrights, music, or books, typically based on a percentage of revenues.

Schedule E

A form used by the IRS for taxpayers to report income and expenses from rental real estate, royalties, partnerships, S corporations, trusts, and residual interests in REMICs.

Royalty Income

Income earned from the right to use intellectual property or natural resources.