Liabilities Are Generally Classified on a Statement of Financial Position

question 72

Multiple Choice

Liabilities are generally classified on a statement of financial position as

• A) tangible liabilities and intangible liabilities.
• B) small liabilities and large liabilities.
• C) present liabilities and future liabilities.
• D) current liabilities and non-current liabilities.

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Definitions:

Automatically Perfected

A legal status of a security interest in which it becomes enforceable against third parties without any further action required by the interest holder.

Possession

Possession refers to the state of having in one's control or ownership of property or goods, legally or factually.

Perfecting

The process of making a security interest or right legally enforceable against third parties, usually by filing a public notice.

Letter-of-credit Rights

Rights to payment under a letter of credit, which is a document from a bank guaranteeing that a seller will receive payment if certain conditions are met.