All of the following statements regarding liabilities are true except:
A)A liability is a probable future payment of assets or services.
B)Potential future wages to be paid to employees should be recorded as liabilities.
C)For a liability to be reported,it must be a present obligation that results from a past transaction or event,and requires a future payment of assets or services.
D)Information about liabilities is more useful when the balance sheet identifies them as either current or long term.
E)Liabilities can involve uncertainty in whom to pay.

Question

Quizplus · Accepted Answer

Potential future wages to be paid to employees should not be recorded as liabilities until the employees have actually earned the wages through their work. Until that point, it is only a potential liability.

All of the Following Statements Regarding Liabilities Are True Except