Which of the following items would NOT be recognised as a liability?
A) Advances from customers for goods and services to be delivered later
B) Estimated warranty on products sold during the year
C) A dispute with a customer where there is some possibility that the company could lose the dispute
D) Amounts owing in wages for work done this period to be paid in the next period

Question

Quizplus · Accepted Answer

A dispute with a customer where there is some possibility that the company could lose the dispute is not yet a liability as it is still uncertain whether the company will actually have to pay or not. The other items listed are all recognized as liabilities as they represent an obligation for the company to pay or deliver something in the future.

Which of the Following Items Would NOT Be Recognised as a Liability