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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Simona

1 months ago

I don't know, Option C sounds like my credit card balance after a shopping spree. Gotta go with B, the 'outflow of economic benefits' part really speaks to me.

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Wilda

11 days ago

User 3: Option B does make sense, it's about settling obligations from past events.

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Bambi

13 days ago

User 2: I agree, but I'm leaning towards Option B because of the 'outflow of economic benefits'.

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Raul

17 days ago

User 1: I think Option C is like my credit card balance after a shopping spree.

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Amber

1 months ago

Option B is the clear winner here. It's the only one that actually mentions the key characteristics of a liability - a present obligation and an outflow of resources.

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Buddy

1 months ago

LOL, Option D sounds like the description of an asset, not a liability. I'm definitely going with Option B, that's the only one that makes sense.

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Darrel

1 months ago

I'm leaning towards Option B as well. It seems to capture the essence of what a liability is - a obligation that will lead to a future outflow of economic benefits.

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Cory

9 days ago

Option B makes the most sense to me as well. It's about obligations leading to outflows of resources.

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Joni

15 days ago

Yes, I think Option B is the most accurate description of a liability.

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Matthew

20 days ago

I agree, Option B does seem to be the best definition of a liability.

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Taryn

2 months ago

Option B sounds like it's describing a liability to me. It talks about a present obligation that will result in an outflow of resources, which is pretty much the definition of a liability.

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Annice

5 days ago

Option B is definitely the correct choice when defining a liability.

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Elina

6 days ago

Yes, option B clearly describes a liability as a present obligation resulting in an outflow of resources.

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Artie

14 days ago

I agree, option B is the best definition of a liability.

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Ashlyn

2 months 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

2 months 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

2 months 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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