Which of the Following Statements Regarding Liabilities Is True

question 19

Multiple Choice

Which of the following statements regarding liabilities is true?

• A) They must arise through a contractual obligation.
• B) They may be attributable to a future transaction or event.
• C) The duty or responsibility obligates the entity.
• D) The entity often has reasonable discretion to avoid the obligation.

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Definitions:

Saving Rates

The proportion of disposable income that is saved by households rather than spent on goods and services.

Real GDP

The total market value of all final goods and services produced in a country in a given year, adjusted for inflation.

Constant Returns To Scale

The property whereby long-run average total cost stays the same as the quantity of output changes.

Inputs

Factors including workforce, materials, and funds employed in the process of creating products or offering services.