Financial Accounting A constructive obligation differs from a legalobligation because ita) Is created by law._?b) Only applies to government entitiesc) Has no financial impactd) Is created by valid expectations from past.practice

Explanation of Constructive Obligation: A constructive obligation is a duty or responsibility that…

Answered: A constructive obligation differs from…

Financial Accounting Intro Concepts Meth/Uses

14th Edition

ISBN:9781285595047

Author:Weil

Publisher:Weil

Chapter4: Balance Sheet: Presenting And Analyzing Resources And Financing

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17. Gain contingencies should a. be accrued if they are probable and can be reasonably estimatedb. not be accrued in the accountsc. be accrued only if they are the result of litigation or government appropriationd. not be accrued or disclosed in the footnotes
Short-term obligations are reported as noncurrent if the entity has a discretion to refinance it as long-term. True False
In explaining the meaning of obligation in the definition of a liability, the Conceptual Framework states: A. That an obligation is a duty or responsibility that an entity has no practical ability to avoid B. Than an obligation can arise from a duty or responsibility conditional on a future action that the entity itself may take, if the entity has no practical ability to avoid taking that action C. That an obligation can arise from an entity's customary practices, published policies or specific statements, if the entity has no practical ability to avoid those practices, policies or statements D. All of the above
Which of the following is not a criterion that must be met for an item to be classified as a liability? A certain cash payment will occur in the future. A sacrifice will require the entity’s assets or services. There is a probable future sacrifice. There is a present obligation that results from a past transaction.
For a liability to be recognised within the financial statements, it needs to be reasonably apparent that an obligation to an ____________exists. Select one alternative: legal obligation external party another party counter party
In accordance with AASB 9, the recognition of a financial asset or financial liability will be influenced by considerations as to whether there is a contractual right to exchange financial assets or financial liabilities with another entity under conditions that are potentially favourable, or potentially unfavourable, to the entity. Explain what this requirement means.
t29
Consider the following statements: a. Only Statement I is true. b. Only Statement II is true. c. Both Statements I and II are true. d. Neither Statement I nor II is true.
Suppose the analysis of a loss contingency indicates that an obligation is not probable. What accounting treatment if any is warranted?
If an entity has elected to use the fair value option for a financial liability; a. It is measured at fair value through other comprehensive income. b. It is measured at fair value through profit or loss. c. It is measured at amortized cost. d. Fair value op don is prohibited for financial liabilities.
With reference to IAS 37, identify the correct statements from the following: I. A contingent asset should be disclosed by note if an inflow of economic benefits is probable. II. Contingent assets must not be recognised in financial statements unless an inflow of economic benefits is virtually certain to arise. III. No disclosure of a contingent liability is required if the possibility of a transfer of economic benefits arising is remote. I and III only I, II and III II and III only I and II only
With reference to IAS 37, identify the correct statements from the following: I. A contingent asset should be disclosed by note if an inflow of economic benefits is probable. II. Contingent assets must not be recognised in financial statements unless an inflow of economic benefits is virtually certain to arise. III. No disclosure of a contingent liability is required if the possibility of a transfer of economic benefits arising is remote. a- I, II and III b- I and II only c- II and III only d- I and III only

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A constructive obligation differs from a legal obligation because it a) Is created by law. _? b) Only applies to government entities c) Has no financial impact d) Is created by valid expectations from past. practice