Which of These Is Not an Essential Characteristic of a Liability

question 40

Multiple Choice

Which of these is not an essential characteristic of a liability under the Conceptual
Framework?

• A) A legal debt.
• B) A present obligation to an external party.
• C) An outflow of resources embodying economic benefits.
• D) A past transaction or event.

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Definitions:

Discontinuing

The process of ending the manufacture, support, or offering of a product or service.

Allocated Fixed Costs

Fixed costs that are assigned or distributed to various departments, products, or activities based on specific criteria.

Net Income

The total earnings of a company after subtracting all expenses from its total revenues; also known as net profit.

Income

The amount of money received by an individual or business in exchange for providing a good or service or through investing capital.