Regarding Liabilities,which of the Following Statements Is Incorrect

question 87

Multiple Choice

Regarding liabilities,which of the following statements is incorrect?

• A) Liabilities represent one of the two claims to assets.
• B) A creditor who has loaned money to a business has a claim to some of the business's assets until the business pays the debt.
• C) Liabilities are economic resources that are expected to benefit the business in the future.
• D) Many, but not all, liabilities have the word payable in their titles.

---

Definitions:

Adjusted Basis

The original cost of an asset, adjusted for factors like improvements or depreciation, used to calculate capital gains or losses for tax purposes.

Recognized Gain

The income gained through the disposal of an asset, which is required to be declared for taxation reasons.

Adjusted Basis

The value of an asset for tax purposes, adjusted for improvements, depreciation, and deductions, used to calculate gains or losses on sale or disposal.

Fair Market Value

The price at which an asset would be bought or sold in an open market.