Which of the Following Accounts Is a Liability

question 149

Multiple Choice

Which of the following accounts is a liability?

• A) Unexpired Insurance
• B) Insurance Expense
• C) Prepaid Insurance
• D) Unearned Insurance Fees

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Definitions:

Future Sacrifice

The giving up of future economic benefits as part of a transaction or financial obligation, often related to expenses or liabilities that will result in a decrease in assets or an increase in other liabilities.

Legally Enforceable

A condition where a contract or agreement has terms that can be compelled or upheld by law, granting parties the ability to seek legal remedies in case of breach.

Probable Future Transfer

An anticipated movement of assets, liabilities, or ownership interests that is likely to occur based on current conditions or known events.

Current Liabilities

Obligations or debts a company is expected to pay within one year, often including accounts payable, short-term loans, and other similar liabilities.