BUSINESS ADMINISTRATION
FINANCIAL ACCOUNTING
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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Which of the following statements best defines a liability?
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A liability is an obligation arising from a past transaction or event.
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A liability is a legally binding amount owed to a third party.
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A liability is an obligation arising from a past transaction or event which is expected to be settled by an outflow of economic benefits.
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A liability is anything which results in an outflow of economic benefits from an entity
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Explanation:
Detailed explanation-1: -A liability (generally speaking) is something that is owed to somebody else. Liability can also mean a legal or regulatory risk or obligation. In accounting, companies book liabilities in opposition to assets.
Detailed explanation-2: -Liabilities are debts or obligations a person or company owes to someone else.
Detailed explanation-3: -10.2 A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits.
There is 1 question to complete.