Asked by Hardi Patel on Jun 14, 2024
Verified
One example of a liability that is not a financial liability is
A) notes payable.
B) deferred revenue.
C) bonds payable.
D) financial lease.
Financial Liability
An obligation to pay money to another party, including loans, bond issuances, and accounts payable.
Notes Payable
A formal, written agreement to pay a certain amount of money, with interest, by a specified future date.
Deferred Revenue
Income received by a company for goods or services yet to be delivered or performed, recognized as a liability.
- Differentiate between financial and non-financial liabilities and their respective accounting treatment.
Verified Answer
NF
Nor Fatin HazirahJun 15, 2024
Final Answer :
B
Explanation :
Deferred revenue is considered a liability that is not a financial liability because it represents an obligation to provide goods or services in the future, rather than an obligation to pay cash or another financial asset.
Learning Objectives
- Differentiate between financial and non-financial liabilities and their respective accounting treatment.