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Which of the following represent the typical characteristics of liabilities? (Select all that apply.)

a Future cash payments cannot be measured.
b Future cash payments are certain or estimable.
c The requirement of future cash payments.
d Interest accrues as time passes on long-term liabilities.

1 Answer

3 votes

Final answer:

The typical characteristics of liabilities include future cash payments cannot be measured, the requirement of future cash payments, and interest accrues as time passes on long-term liabilities. So, the correct options are a), c) and d).

Step-by-step explanation:

The typical characteristics of liabilities include:

• Future cash payments cannot be measured: Liabilities often involve obligations that cannot be accurately quantified, such as legal settlements or environmental clean-up costs.

• The requirement of future cash payments: Liabilities involve obligations to make future cash payments or provide goods or services to others.

• Interest accrues as time passes on long-term liabilities: Long-term liabilities, such as bonds or loans, typically accrue interest over time.

Therefore, the correct options that represent the typical characteristics of liabilities are:

• Future cash payments cannot be measured

• The requirement of future cash payments

• Interest accrues as time passes on long-term liabilities

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