Question

what are the three characteristics of liabilities

Answer 1

A liability has three essential characteristics:

1. It embodies a present duty or responsibility to one or more other entities that entails settlement by probable future transfer or use of assets at a specified or determinable date, on occurrence of a specified event, or on demand. This means It is a present obligation that entails settlement by probable future transfer or use of cash, goods, or services.

2. The duty or responsibility obligates a particular entity, leaving it little or no discretion to avoid the future sacrifice.This means it is an unavoidable obligation

3. The transaction or other event obligating the entity has already happened.