Which of the following statements regarding liabilities is true?
A) They must arise through a contractual obligation.
B) They may be attributable to a future transaction or event.
C) The duty or responsibility obligates the entity.
D) The entity often has reasonable discretion to avoid the obligation.

Question

Quizplus · Accepted Answer

Liabilities are present obligations of an entity arising from past events, and they obligate the entity to settle them, typically through the transfer of resources.

Which of the Following Statements Regarding Liabilities Is True