Asked by Meera Patel on May 13, 2024
Verified
All of the following are examples of legal liabilities except
A) notes payable
B) sales tax payable
C) sick pay payable (may be taken as time off)
D) property taxes payable
Legal Liabilities
Obligations arising from laws or regulations that a company is required to pay, such as fines, settlements, or judgments.
Sick Pay Payable
A liability account that represents the amount of sick pay owed to employees but has not yet been paid.
Notes Payable
Liabilities representing amounts borrowed by a company that must be repaid, often with interest, as evidenced by a promissory note.
- Separate and categorize differing forms of liabilities, specifically including legal responsibilities.
Verified Answer
LR
Lizette RonquilloMay 17, 2024
Final Answer :
C
Explanation :
Sick pay payable is not a legal liability as it is an expense incurred by the company for employee benefits and is not a legal obligation. Notes payable, sales tax payable, and property taxes payable are legal liabilities as they are obligations that the company has to pay to creditors or to the government.
Learning Objectives
- Separate and categorize differing forms of liabilities, specifically including legal responsibilities.