Which Statement Is False

question 37

Multiple Choice

Which statement is false?

• A) To be a liability, the transaction or event obligating the entity must already have occurred.
• B) The net worth of an entity is equal to its assets.
• C) The specific identity of the "creditor" need not be known with certainty for a liability to exist.
• D) Shareholders' equity may not exist apart from the corporate assets and liabilities.

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Definitions:

Salvage Value

The expected salvage value of an asset at the termination of its useful period.

Depreciated

The reduction in the value of an asset over time due to wear and tear, aging, or obsolescence.

Patent

A government-granted right that gives the holder exclusive control over the production, use, and sale of an invention for a set period.

Exclusive Right

A legal guarantee that grants an individual or entity sole permission to utilize, produce, or sell a particular product or service.