'A present obligation of the entity arising from past events,the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits' is the definition of:
A) an expense.
B) a liability.
C) equity.
D) an asset.

Question

Quizplus · Accepted Answer

The definition provided matches the characteristics of a liability, which is a present obligation of the entity arising from past events, where settlement is expected to result in an outflow of resources embodying economic benefits. An expense is a decrease in economic resources due to past events, while equity represents the residual interest in assets after liabilities are deducted. An asset embodies economic resources controlled by an entity as a result of past events and has probable future economic benefits.

'A Present Obligation of the Entity Arising from Past Events,the