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Which of the following is true as it relates to an estimated liability?

Multiple Choice

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A type of estimated liability that need not be recorded is a warranty where the seller's obligation does not require payments unless products fail and are returned for repairs

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None of the choices are correct.

An estimated liability is a known obligation of an uncertain amount and cannot be reasonably estimated

An estimated liability is a known obligation of an uncertain amount, but one that can be reasonably estimated

A type of estimated liability that need not be recorded is a corporation's income tax expense, as the actual total income tax for the period is not known until after the account period when information is finalized