Which of the Following Statements About Liabilities Is NOT True

question 28

Multiple Choice

Which of the following statements about liabilities is NOT true?

• A) An intention to repair a machine in six months' time does not give rise to a liability.
• B) If a liability is to be reliably measured,estimation procedures cannot be used.
• C) For a liability to exist,the entity must not be able to avoid the sacrifice of economic resources.
• D) A liability is a present obligation arising from past events.

Comprehend the concepts of derived demand and how it differs from final demand.

Understand the effects of complementary and substitute resources on productivity.

Differentiate between the substitution effect and the output effect and their impact on resource allocation.

Apply the principle of optimal resource mix in firm operation contexts.

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Definitions:

Salvage Value

The estimated residual value of an asset at the end of its useful life.

Production Order Quantity

The optimal order quantity a company should produce to minimize storage and production costs while meeting demand.

Daily Demand Rate

The average quantity of a product or service that is requested by customers over the course of a single day.

Production Rate

The speed at which goods are manufactured or produced within a given time period.