Which of the Following Statements About a Liability Is True

question 23

Multiple Choice

Which of the following statements about a liability is true?

• A) A liability is restricted to being a legal debt.
• B) A liability must result from a past transaction or event.
• C) A liability arises when a business creates reserves for contingencies.
• D) A liability results even if the entity can avoid the sacrifice of economic reasons.

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Definitions:

Deceased Person

An individual who has died.

General Jurisdiction

The authority of a court to hear a wide range of cases, not limited by subject matter, within its geographic area.

Civil Lawsuits

Legal actions initiated by individuals or entities seeking remedies or damages from another party without criminal implications.

Criminal Actions

Legal proceedings brought by the state against individuals or entities accused of violating criminal law.