The criteria for recognition of a liability include which of the following?
A)The obligation represents a present obligation, not a potential future commitment or intent.
B)The obligation exists as a result of a past transaction or exchange, called the obligating event.
C)The obligation requires the probable future sacrifice of an economic resource that the firm has little or no discretion to avoid.
D)The obligation has a relevant measurement attribute that the firm can quantify with sufficient reliability.
E)all of the above

Question

Quizplus · Accepted Answer

All of the above criteria must be met for recognition of a liability under generally accepted accounting principles (GAAP). The liability must be a present obligation that arose from a past event, the obligation must require the probable future sacrifice of economic resources, and it must be measurable with sufficient reliability. A potential future commitment or intent does not qualify as a liability until it becomes a present obligation.

The Criteria for Recognition of a Liability Include Which of the Following