All of the Following Are Criteria That Financial Reporting Requires

question 25

Multiple Choice

All of the following are criteria that financial reporting requires before recognizing an obligation as a liability except:

• A) The transaction or event that gave rise to the obligation has already occurred.
• B) The firm has a present obligation and little or no discretion to avoid the transfer.
• C) The firm must know the precise amount of the obligation before recording it.
• D) The obligation involves a probable future sacrifice of economic benefits-a future transfer of cash, goods, or services; the forgoing of a future cash receipt; or the transfer of equity shares-at a specified or determinable date.The firm can measure with reasonable precision the cash-equivalent value of the resources needed to satisfy the obligation.