Ch. 9 - Current LiabilitiesWorksheetSee all chapters
All Chapters
Ch. 1 - Introduction to Accounting
Ch. 2 - Transaction Analysis
Ch. 3 - Accrual Accounting Concepts
Ch. 4 - Merchandising Operations
Ch. 5 - Inventory
Ch. 6 - Internal Controls and Reporting Cash
Ch. 7 - Receivables and Investments
Ch. 8 - Long Lived Assets
Ch. 9 - Current Liabilities
Ch. 10 - Time Value of Money
Ch. 11 - Long Term Liabilities
Ch. 12 - Stockholders' Equity
Ch. 13 - Statement of Cash Flows
Ch. 14 - Financial Statement Analysis
Ch. 15 - GAAP vs IFRS
Types of Liabilities
Notes Payable
Payroll and Payroll Taxes
Sales Tax Payable
Current Portion of Long Term Debt
Contingent Liabilities
Estimated Liabilities: Warranties

Concept #1: Contingent Liabilities and Gains

Practice: Sumsang designs and sells smartphones for personal and commercial use. During the current year, the product engineers notified management of a flaw in the design that could cause the latest model to spontaneously combust. After a further investigation, it was noted that a product recall was probable, with an estimated cost to the company of $2,500,000. What influence might this information have on the current year financial statements?