According to the Existing IFRS and the CICA Handbook Part

question 66

Multiple Choice

According to the existing IFRS and the CICA Handbook Part II guidelines, which of the following is NOT an essential characteristic of a liability?

• A)It embodies a duty or responsibility.
• B)The transaction or event that obliges the entity has occurred.
• C)The obligation is enforceable on the other party.
• D)The entity has little or no discretion to avoid the duty.

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Definitions:

Purchase Obligation

An agreement that legally binds a company to buy a specified amount of goods or services at predetermined prices in the future.

Gross Profit Margin

A financial metric that indicates the percentage of revenue that exceeds the cost of goods sold, showing the financial health and profitability of a company's core activities.

Gross Profit Percentage

A financial ratio that compares the gross profit of a business to its net sales, expressed as a percentage.

Net Sales

The revenue from sales of goods or services after subtracting returns, allowances for damaged or missing goods, and discounts.