Liabilities are probable future sacrifices of economic benefits. Explain each of the four characteristics of a liability in your own words in detail. Gift cards are a form of unearned revenue. The book mentioned about how to show income from expiration. In Illinois since 2005, a store issued gift card cannot expire. What would you do if your gift card liability kept getting larger because people did not use their cards and they cannot expire? Customer loyalty rewards can expire. How would you keep a record of when to record the expiration? Warranty expense is a contingent liability that must be estimated and recorded because it is both probable and can be estimated? Can you think of another contingent liability that must be recorded? See the chart at Exhibit 8.5. Can you think of three more items that could be contingent liabilities and explain which of the six areas they fall into and whether a journal entry must be made; must be disclosed in a financial statement footnote; or ignored. Both investors and creditors are interested in a company's liquidity. Define the four liquidity ratios and explain how each measures liquidity and the main differences between them