Which Statement Is Not True

question 62

Multiple Choice

Which statement is not true?

• A)To be a liability, the transaction or event obligating the entity must already have occurred.
• B)The net worth of an entity is equal to its assets.
• C)The specific identity of the "creditor" need not be known with certainty for a liability to exist.
• D)Stockholders' equity may not exist apart from the corporate assets and liabilities.

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Definitions:

Financial Reporting

The practice of developing statements to convey the financial standing of an organization to its executives, investment stakeholders, and government officials.

Tax Accounting

A system of accounting methods and principles focused on taxes rather than the appearance of public financial statements, governing how a company reports its income and expenses for tax purposes.

Consolidated Income Tax Return

A consolidated income tax return is filed by a corporate group that combines the tax liabilities and incomes of all the entities within the group, allowing them to file as a single entity.

Intra-entity Transfers

Transactions of goods, services, or resources between divisions, departments, or affiliates within the same legal entity.