Which of the following is not an essential characteristic of a liability?
A) It has arisen as a result of a past transaction or event.
B) It represents an internal claim on the entity's assets.
C) It represents a present obligation to another entity.
D) It requires the transfer of an economic resource to another entity.

Question

Quizplus · Accepted Answer

Liabilities represent external claims on an entity's assets, not internal claims. They are obligations to transfer resources to other entities, arising from past transactions or events.

Which of the Following Is Not an Essential Characteristic of a Liability