Identify the Item Which Is Not Necessarily a Liability

question 43

Multiple Choice

Identify the item which is not necessarily a liability.

• A) Provision for holiday pay.
• B) Bank overdraft.
• C) Loan to employee.
• D) None of the above, i.e., all are necessarily liabilities.

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Definitions:

Capital Balances

The amount of equity in a company or partnership owned by shareholders or partners, respectively.

Interest

The cost of borrowing money, typically expressed as a percentage of the principal, paid to the lender over a period of time.

Cash Investment

A financial contribution made in the form of cash, often to purchase securities, assets, or fund business operations.

Salary Allowances

Payments in addition to the basic salary, intended to cover specific expenses or compensate for particular conditions of employment.