Which of the following descriptions would not fit the definition of a liability?
A) Obligation to deliver services already paid for
B) Result of past transaction
C) Future obligation for future salary payments
D) Present obligation for future payment

Question

Quizplus · Accepted Answer

A liability is a present obligation resulting from past transactions that requires future payments or performance. Option C describes a future obligation for future salary payments, which is not a present obligation and hence, does not fit the definition of a liability. Options A, B, and D all involve present obligations resulting from past transactions or events, and therefore, they fit the definition of liabilities.

Which of the Following Descriptions Would Not Fit the Definition