Liabilities Which Fail the Recognition Criteria and Where the Possibility

question 13

Multiple Choice

Liabilities which fail the recognition criteria and where the possibility of an outflow is remote should:

• A) be recognised as an accrual
• B) be recognised as a provision
• C) be recognised as a contingent liability
• D) not be recognised in the financial statement at all

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Definitions:

Welfare

Welfare refers to government programs and policies designed to support the well-being of individuals and communities, including health care, education, and financial aid.

Public Charity

A type of nonprofit organization that receives a significant portion of its funding from the public and operates for the benefit of the general public.

Income Statistics

Data that represent the distribution of income across different segments of the population.

Poverty

A condition where individuals or communities lack the financial resources and essentials for a minimum standard of living.