Liabilities Which Do Not Meet the Recognition Criteria and Where

question 25

Multiple Choice

Liabilities which do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote should:

• A) be recognised as an accrual.
• B) be recognised as a provision.
• C) be recognised as a contingent liability.
• D) not be recognised in the financial statement at all.

Comprehend the role of accrual accounting in financial reporting.

Acknowledge the importance of full disclosure in financial reporting and its enhancements.

Identify and understand the qualitative characteristics of accounting information.

Differentiate between various types of financial reports and their focuses.

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