SOLVED

11.1Â Â Learning Objective 1 1) Which of the following characteristic is required for a liability under IFRS Framework? A) A past obligation. B) A present obligation. C) An unknown obligation. D) A future obligation. 2) Which of the following characteristic is required for a liability under IFRS Framework? A) Arises from a past obligation. B) Is a present obligation. C) Is an unknown obligation. D) Is a future obligation. 3) Which of the following characteristic is required for a liability under IFRS Framework? A) Arises from a past event. B) Arises from a non-financial transaction. C) Arises from a future transaction. D) Arises from a forecasted transaction. 4) Which of the following characteristic is required for a “liability” under IFRS Framework? A) Expected to result in the inflow of economic benefits. B) Expected to result in the inflow of economic benefits that are measurable. C) Expected to result in the outflow of resources embodying economic benefits. D) Expected to result in the outflow of economic benefits that are virtually certain. 5) Which of the following is correct about a “liability” under IFRS Framework? A) A future obligation arising from past events, the settlement of which is expected to result in an inflow of resources. B) A present obligation arising from past events, the settlement of which is expected to result in an inflow of resources. C) A past obligation arising from past events, the settlement of which is expected to result in an outflow of resources. D) A present obligation arising from past events, the settlement of which is expected to result in an outflow of resources. 6) Which is an example of a liability? A) The decision to borrow $150,000 from the ABC Bank on January 15, 2013. B) Withdrawing $10,000 from the operating line of credit on January 15, 2013. C) Selecting the supplier to provide the raw materials for the manufacturing process. D) Choosing the site for a future plant expansion from a list of several possible choices. 7) Which of the following is a financial liability? A) A magazine publisher’s obligation to provide the magazine monthly for an agreed upon period. B) Warranties. C) Accounts payable. D) Income taxes payable. 8) What are “liabilities”? Differentiate between financial liabilities and nonfinancial liabilities. 9) Why is it important to distinguish financial from non-financial liabilities? 10) Explain the meaning of “provision” and give an example.