Which of the Following CANNOT Be a Liability

question 35

Multiple Choice

Which of the following CANNOT be a liability?

• A) allowance for doubtful debts
• B) provision for employee entitlements
• C) provision for dividends
• D) provision for warranties.

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Definitions:

Risk-Free Rate

The return on an investment with no risk of financial loss, typically represented by the yield on government securities like U.S. Treasury bonds.

Inflation Rate

The rate at which the general level of prices for goods and services is rising, eroding purchasing power.

Convertible Bond

A type of bond that can be converted into a predetermined amount of the issuer's equity at certain times during its life, usually at the discretion of the bondholder.

Put Option

A financial contract giving the holder the right, but not the obligation, to sell a specified amount of an asset at a set price within a specified time.