An Entity Has Decided to Commit Itself to the Purchase

question 27

Multiple Choice

An entity has decided to commit itself to the purchase of a new building in the next financial year.Under the Framework:

• A) a liability exists because it is probable that a future sacrifice of economic benefits will be required
• B) no liability exists because there is no present obligation
• C) a liability exists because there is a constructive obligation
• D) a liability exists because there is an equitable obligation

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Definitions:

Seligman

A psychologist known for his work on learned helplessness, positive psychology, and theories on depression and wellbeing.

External Factors

Elements outside an individual that can influence their behavior, thoughts, and feelings.

Decreased Interest

A phenomenon where an individual shows less enthusiasm or engagement in activities they previously found appealing.

Depressed

Experiencing persistent sadness, low mood, and a lack of interest or pleasure in normally enjoyable activities.