The characteristics of a liability include:
A) Occurrence of a past transaction or event.
B) Requirement of future payment of assets or rendering of services.
C) A liability can be current or long term.
D) Existence of a present obligation.
E) All of these answers are correct.

Question

Quizplus · Accepted Answer

All of the choices listed are characteristics of a liability. A liability arises from a past transaction or event that has created a present obligation to transfer an economic benefit. It requires the future payment of assets or rendering of services to satisfy the obligation, and can be classified as current or long term depending on its payment due date. Therefore, all options are correct.

The Characteristics of a Liability Include