Which of the Following Statements Regarding Measuring Liabilities Is Incorrect

question 2

Multiple Choice

Which of the following statements regarding measuring liabilities is incorrect?

• A)The effects of non-performance risk must be taken into consideration in measuring the fair value of a liability.
• B)Present value techniques may be very useful in the measurement of liabilities.
• C)The effects of non-performance risk is not relevant to measuring the fair value of a liability.
• D)The highest and best use does not apply in the measurement of the fair value of a liability.

---

Definitions:

Cultural Relativity

The need to consider the unique characteristics of the culture in which behavior takes place.

Social Context

The immediate physical and social setting in which people live or in which something happens or develops.

Situational Context

The environmental, social, or psychological circumstances that surround a specific event or situation, influencing its outcome.

DSM-5

The fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, a classification and diagnostic tool for mental health professionals.