Which of the Following Items Would NOT Be Recognised as a Liability

question 8

Multiple Choice

Which of the following items would NOT be recognised as a liability?

• A) Advances from customers for goods and services to be delivered later
• B) Warranty on products sold during the year
• C) Final dividend recommended by directors,prior to the annual meeting
• D) A dispute with a customer where there is some possibility that the company could lose the dispute

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Definitions:

Joint Tenancy

An estate held by two or more jointly, with an equal right in all to share in the enjoyments of the land during their lives. An incident of joint tenancy is the right of survivorship.

Co-owners

Co-owners share joint ownership or possession of property or assets, each holding a portion of the rights, responsibilities, and benefits associated with the ownership.

Easement

The right to make certain uses of another person’s property or to prevent another person from making certain uses of his own property.

Ownership Transfer

The process by which the legal rights of owning an asset or property are transferred from one person or entity to another.