Which of the Following Represents a Liability

question 66

Multiple Choice

Which of the following represents a liability?

• A) The obligation to pay for goods that a company expects to order from suppliers next year.
• B) The obligation to provide goods that customers have ordered and paid for during the current year.
• C) The obligation to pay interest on a five-year note payable that was issued the last day of the current year.
• D) The obligation to distribute shares of a company's own common stock next year as a result of a stock dividend declared near the end of the current year.

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Definitions:

Coordination of Effort

The organisation of individual and group efforts in a way that maximizes efficiency and achievement of common goals.

Common Purpose

A shared goal or vision that unites a group of individuals or an organization.

Division of Labor

The allocation of different parts of a manufacturing process or task to different individuals in order to improve efficiency.

Hierarchy of Authority

The structured ranking of positions within an organization, where every level is subordinate to the one above it.