Which of the following represents a liability? The obligation to pay for goods that an entity expects to order from suppliers in the near future. The obligation to provide goods that customers have ordered and paid for during the current year. The obligation to pay interest on a five-year note payable that was issued the last day of the current year. The obligation to distribute an entity’s own shares next year as a result of a stock/share dividend declared by the board of directors near the end of the current year.

Income Tax Fundamentals 2020
38th Edition
ISBN:9780357391129
Author:WHITTENBURG
Publisher:WHITTENBURG
Chapter11: The Corporate Income Tax
Section: Chapter Questions
Problem 13MCQ
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Which of the following represents a liability?

  1. The obligation to pay for goods that an entity expects to order from suppliers in the near future.
  2. The obligation to provide goods that customers have ordered and paid for during the current year.
  3. The obligation to pay interest on a five-year note payable that was issued the last day of the current year.
  4. The obligation to distribute an entity’s own shares next year as a result of a stock/share dividend declared by the board of directors near the end of the current year.
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