Which of the following would NOT be a liability?
A)The signing of a three-year employment contract at a fixed annual salary
B)An obligation to provide goods or services in the future
C)A note payable with no specified maturity date
D)An obligation that is estimated in amount

Question

Quizplus · Accepted Answer

A three-year employment contract at a fixed annual salary is not a liability because it represents an arrangement between the employer and employee for the provision of services, rather than an obligation to pay a third party. Liabilities are obligations that arise from past transactions or events and require future sacrifices of resources to settle. Choices B, C, and D are all examples of liabilities because they represent obligations to provide goods or services in the future or to make payments to third parties.

Which of the Following Would NOT Be a Liability