Which of the Following Best Describes a Liability

question 80

Multiple Choice

Which of the following best describes a liability?

• A) Liabilities are a form of share capital.
• B) Liabilities are future economic benefits to which a company is entitled.
• C) Liabilities are accounts receivable of the company.
• D) Liabilities are economic obligations to creditors to be paid at some future date by the company.

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Definitions:

Provincial Personal Property

Property other than real estate, such as cars, furniture, or jewelry, that is subject to the laws of a specific province in Canada.

Security Interest

A legal claim or lien on assets, which secures payment or performance of an obligation to the asset's holder.

Bona Fide Purchaser

A legal term for a person who acquires property in good faith and without notice of any other party's claim to the title of that property.

Automobile

A road vehicle, typically with four wheels, powered by an internal combustion engine or electric motor, used for transportation.