Podcast
Questions and Answers
Which of the following characteristics defines a liability?
Which of the following characteristics defines a liability?
- A transaction or event that obligates the entity in the past
- A transaction or event that may obligate the entity in the future
- A transaction or event that obligates the entity in the future (correct)
- A transaction or event that obligates the entity in the present
Which of the following is a characteristic of a liability that obligates the entity to another?
Which of the following is a characteristic of a liability that obligates the entity to another?
- The entity is obligated to settle only if it chooses to
- The entity has little or no discretion to avoid settlement (correct)
- The entity has complete discretion to avoid settlement
- The entity is not obligated to settle
Which of the following is an example of a liability?
Which of the following is an example of a liability?
- A payment made for goods or services already received
- A payment made for goods or services that will never be received
- A payment made for goods or services to be received in the future (correct)
- A payment made in advance for goods or services
Flashcards
Liability
Liability
A duty or responsibility obligating an entity to another, arising from past transactions or events.
No Discretion to Avoid Settlement
No Discretion to Avoid Settlement
A characteristic of a liability where the entity has limited to no ability to prevent fulfilling the obligation.
Example of a Liability
Example of a Liability
A payment received for products or services that will be delivered at a later date.
