Identify the item which is not necessarily a liability.
A) Provision for holiday pay.
B) Bank overdraft.
C) Loan to employee.
D) None of the above, i.e., all are necessarily liabilities.

Question

Quizplus · Accepted Answer

A provision for holiday pay and a bank overdraft are examples of liabilities as they represent obligations that the company owes to others. However, a loan to an employee is not necessarily a liability as it depends on the terms and conditions of the loan. If the loan is a recoverable advance or is secured by collateral, it may not be considered a liability.

Identify the Item Which Is Not Necessarily a Liability