Worldatwork Exam T7 Topic 2 Question 90 Discussion

Actual exam question for Worldatwork's T7 exam

Question #: 90
Topic #: 2

[All T7 Questions]

Which of the following best defines the term ''liability''?

AA resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity

BA present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits

CDecreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants

DIncreases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants

Show Suggested Answer

Suggested Answer: C

by Nickie at Jun 20, 2024, 02:51 PM

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Ashlyn

15 days ago

I'm not sure, I think it might be A) A resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. It sounds like it could also be a liability.

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Arlen

16 days ago

I agree with Kenneth, option B makes the most sense. It's about obligations that will result in outflows of resources.

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Kenneth

19 days ago

I think the answer is B) A present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

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