Which of the following is not one of the three criteria for recognition of a liability?
A) The obligation involves a probable future sacrifice of resources at a specified or determinable date.
B) The firm is required to make a cash payment for the goods or services.
C) The firm has little or no discretion to avoid the transfer.
D) The transaction or event giving rise to the liability has already occurred.

Question

Quizplus · Accepted Answer

While a liability often involves a cash payment, it is not a necessary criterion for recognition. The three criteria are: 1) the obligation involves a probable future sacrifice of resources; 2) the obligation arises from a past event or transaction; and 3) the firm has little or no discretion to avoid the transfer.

Which of the Following Is Not One of the Three