The Characteristics of a Liability Include

question 47

Multiple Choice

The characteristics of a liability include:

• A) Occurrence of a past transaction or event.
• B) Requirement of future payment of assets or rendering of services.
• C) A liability can be current or long term.
• D) Existence of a present obligation.
• E) All of these answers are correct.

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Definitions:

Contractual Agreement

A legally binding agreement between two or more parties outlining the terms and conditions of a deal.

Benefits

Various forms of non-wage compensations provided to employees in addition to their normal wages or salaries.

Bond Indenture

A legal contract between a bond issuer and a bondholder specifying the terms of the bond, such as the interest rate, repayment schedule, and other conditions.

Bond Issuer

An entity, such as a corporation or government, that raises funds by issuing bonds, obligating itself to pay interest to bondholders and repay the principal at maturity.