Which of the following best describes a liability?
A)Any obligation, whether enforceable or not, is a liability
B)A liability is an enforceable economic burden or obligation
C)A liability is a legal economic benefit
D)None of these

Question

Quizplus · Accepted Answer

A liability is an enforceable economic burden or obligation. It is 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. It is important to note that for an obligation to be recognized as a liability, it must be enforceable by law or contract. Choice A is incorrect because the obligation must be enforceable. Choice C is also incorrect because a liability is not a legal economic benefit, but rather a legal economic burden or obligation. Choice D is incorrect because one of the choices must be selected.

Which of the Following Best Describes a Liability