Which of the following statements is NOT true about recognition and subsequent accounting for financial liabilities?
A) They are initially recognized at their fair value.
B) After acquisition, they continue to be accounted for at fair value.
C) After acquisition, they are generally accounted for at amortized cost.
D) Short-term liabilities, such as accounts payable, are usually recorded at their maturity value.

Question

Quizplus · Accepted Answer

After acquisition, financial liabilities are generally accounted for at amortized cost, not fair value. Option A is true, as financial liabilities are initially recognized at fair value. Option C is true, as this is the typical accounting treatment for financial liabilities after they are acquired. Option D is partially true, as short-term liabilities like accounts payable may be recorded at their maturity value, but this is not always the case.

Which of the Following Statements Is NOT True About Recognition