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Basic Question 1 of 5
Liabilities are ______
B. obligations to transfer ownership shares to other entities in the future
C. obligations arising from past transactions and payable in assets or services in the future.
D. a contractual obligation, such as a purchase order issued for a specific item of inventory or equipment to be delivered in the future.
A. any accounts having credit balances on the balance sheet
B. obligations to transfer ownership shares to other entities in the future
C. obligations arising from past transactions and payable in assets or services in the future.
D. a contractual obligation, such as a purchase order issued for a specific item of inventory or equipment to be delivered in the future.
User Contributed Comments 5
| User | Comment |
|---|---|
| pappoo | Why not D is also correct? |
| poomie83 | It is a sale resulting in decrease of inventory and increase in revenue and accounts receivable |
| gill15 | Isnt D an increase in Unearned Revenue which is a liability? Or is it not considered in this case because it is just contractual and no money has been transferred from on to the other? |
| ddrmax | @gill, that's correct. contractual is the key |
| Shaan23 | Gill - could pick up on that. Would not have thought of that. Way to read all the choices. |
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Edward Liu
Learning Outcome Statements
explain the financial reporting and disclosures related to non-current liabilities
CFA® 2024 Level I Curriculum, Volume 2, Module 3.