Which of the Following Is an Example of a Liability

question 18

Multiple Choice

Which of the following is an example of a liability where there is no corresponding asset?

• A) A debenture issued by a listed company.
• B) A mortgage.
• C) A provision for warranties.
• D) A provision for decommissioning.

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Definitions:

Direct Labor

The wages and salaries paid to employees who are directly involved in the production of goods or the provision of services.

Manufacturing Overhead

Costs in the production process that are not directly tied to a specific product, such as factory utilities or salaries of supervisors.

Product Costs

Expenses directly tied to the production of goods or services, including direct materials, direct labor, and manufacturing overhead.

Absorption Costing

A method of costing that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed manufacturing overhead - in the cost of a unit of product.