Asked by autumn hager on May 10, 2024
Verified
Which of the following statements does not describe an essential characteristic of a liability?
A) A liability is a present obligation that will be settled by a probable future transfer or use of assets.
B) The obligated entity has little or no discretion to avoid the future sacrifice.
C) The identity of the recipient must be known to the obligated party.
D) The transaction or event obligating the enterprise has already occurred.
Future Sacrifice
The expected loss or cost in the future due to present decisions or commitments.
Essential Characteristic
A fundamental or inherent property that defines an entity, distinguishing it from others.
Liability
A company's financial debts or obligations that arise during the course of business operations.
- Comprehend the essential attributes and categorizations of liabilities.
Verified Answer
JO
janeth ornelasMay 14, 2024
Final Answer :
C
Explanation :
The identity of the recipient does not need to be known to the obligated party for a liability to exist. The other characteristics listed in choices A, B, and D are essential characteristics of a liability.
Learning Objectives
- Comprehend the essential attributes and categorizations of liabilities.