Asked by Mursal Hamdard on Jul 26, 2024
Verified
Which of the following statements is true?
A) One of the essential characteristics of a liability is that the transaction or other event obligating the entity will probably occur in the future.
B) To be a liability, there must be a duty or responsibility that obligates a particular entity.
C) To qualify as a liability, there must be a legally enforceable claim.
D) In order to have a liability, the identity of the recipient must be known.
Liability
A financial obligation or debt owed by a company to another entity, payable in the future.
Legally Enforceable
Describes a contract or agreement that is binding under law and can be upheld in a court.
Future Transfer
A financial arrangement or transaction planned to be executed at a future date.
- Understand the basic characteristics and classifications of liabilities.
Verified Answer
RC
Rassa ChamlingJul 31, 2024
Final Answer :
B
Explanation :
Liabilities are defined by the presence of a duty or responsibility that obligates a particular entity, regardless of whether the obligation is legally enforceable or whether the recipient's identity is known. This encompasses a broad range of obligations, including those that are expected to be settled in the future.
Learning Objectives
- Understand the basic characteristics and classifications of liabilities.
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