Question

You are the accountant for a company that makes carbonated beverages. In the context of your industry, briefly provide examples of current and long-term-liabilities. Also describe an estimated liability and outline the three important questions concerning the uncertainty of liabilities.

This is an essay that I need to do and I was wondering do I have to research and know about a carbonated beverage company's liabilities? Are is the carbonated beverage part irrelevant?

Answer 1

Current liabilities (to be paid within 12 month)

Example Accounts payable ,short term obligation, tax payable

Long term liabilities (to be paid after 12 month)

Example Deferred tax liabilities, long term loan

Estimated liabilities are those liabilities which are exist on present date but the amount of liability is not fixed.They are owed to third party for which we have received services.

Example Repair of inventory & fixed assets, consumption of electricity units (These liabilities are certain to pay but amount is not known)

Three important question concerning uncertainty of liabilities

• when to pay
• How much to pay
• whom to pay

Yes the carbonated beverage part is irrelevant to know about the liabilities.