In Disclosing Liabilities,a Reporting Entity

question 11

Multiple Choice

In disclosing liabilities,a reporting entity:

• A) Discloses on the basis of the current/non-current liability dichotomy.
• B) Has a choice, based on the notions of relevance and reliability to disclose liabilities either on the basis of the current/non-current liability dichotomy or on the basis of order of liquidity.
• C) Has a choice, based on the principle of conservatism to disclose liabilities either on the basis of the current/non-current liability dichotomy or on the basis of order of liquidity.
• D) Discloses on the basis of order of liquidity.
• E) Discloses on the basis of directions from its auditor.

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Definitions:

Community

A group of people living in the same place or having a particular characteristic in common.

Passive

Describes a non-active or inactive state in which actions or responses are not initiated.

Interactive

Capable of acting in response to user input; engaging in two-way communication.

Tangible

Physical products or goods that can be seen, touched, and used, as opposed to services or digital products which are intangible.