Which of the following is an example of a commitment?
A) Lease
B) Incomes taxes payable
C) Sales taxes payable
D) Dividend payable

Question

Quizplus · Accepted Answer

A lease is a contractual agreement in which a lessee agrees to pay a lessor for the use of property for a specific period of time. This is an example of a commitment because the lessee is legally obligated to make these payments for the length of the lease. In contrast, income taxes payable, sales taxes payable, and dividends payable are all examples of liabilities, but they do not involve a contractual commitment to make payments over a specific period of time.

Which of the Following Is an Example of a Commitment