An obligation to make future payment is
A)Debt refinancing.
B)Debt service.
C)A liability.
D)An asset.

Question

Quizplus · Accepted Answer

An obligation to make future payment is a liability, as it represents a present obligation of the entity to transfer economic resources as a result of past events or transactions. Debt refinancing and debt service are related to debts and do not necessarily involve a future payment obligation. An obligation cannot be considered an asset as assets represent economic benefits that are controlled by the entity as a result of past events or transactions.

An Obligation to Make Future Payment Is