In order to be reported, liabilities must:
A) Involve an outflow of cash.
B) Always have a definite date for payment.
C) Be for a specific amount.
D) Sometimes be estimated.
E) Be certain.

Question

Quizplus · Accepted Answer

Liabilities can sometimes be estimated, particularly in the case of contingent liabilities where the outcome is uncertain, but a possible loss can be reasonably estimated. However, liabilities do not always have a definite date for payment or involve an outflow of cash, and therefore E and A are incorrect. Similarly, liabilities may not always be for a specific amount, particularly in the case of estimated liabilities, so B and C are also incorrect.

In Order to Be Reported, Liabilities Must