Which of the following would cause the recognition of a liability?
A) Credit extended by suppliers.
B) Receipt of cash in advance for services.
C) Recognition of expense prior to the actual payment of cash.
D) All of the above.

Question

Quizplus · Accepted Answer

All the options listed are situations where a company would recognize a liability. A) Credit extended by suppliers results in accounts payable, a liability. B) Receipt of cash in advance for services leads to unearned revenue, a liability until the service is performed. C) Recognition of expense prior to the actual payment of cash creates an accrued expense, also a liability.

Which of the Following Would Cause the Recognition of a Liability