Which of the following statements is not true regarding the three major definitions of accounting liabilities that have evolved over time?
A)Two of the three definitions imply a proprietary view of the firm.
B)The first definition made no distinction between owner's equity and liabilities.
C)Not all definitions have included deferred credits as liabilities.
D)In all three definitions, liabilities include only credit balances that involve a debtor and creditor relation.

Question

Quizplus · Accepted Answer

The third definition of liabilities, known as the Financial Accounting Standards Board's (FASB) current definition, includes both credit and debit balances that involve a debtor and creditor relationship. This means that not all liabilities need to have a credit balance, as debit balances can also represent obligations owed by the company to its creditors. Therefore, statement D is not true as it implies that all three definitions only include credit balances.

Which of the Following Statements Is Not True Regarding the Three