Liabilities are which of the following?
Correct answer: B. Obligations
- A. Resources
- B. Obligations
- C. Future benefits
- D. Expenses
Explanation
Liabilities are present obligations arising from past events that will require settlement through an outflow of economic resources. They are therefore obligations, not resources or future benefits.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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