Under SSAP 5, liability is defined as which of the following?

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Multiple Choice

Under SSAP 5, liability is defined as which of the following?

Under SSAP 5, a liability is a present obligation to transfer assets or provide services that arises from a past transaction or event, and whose settlement is expected to require an outflow of resources. This means the obligation exists now because of something that already happened, and settling it will consume resources. It isn’t a potential, future-only obligation, nor is it an asset or a contingent asset. For example, amounts owed under a contract or a legal debt due for payment are liabilities because the entity is currently obligated to pay.

Under SSAP 5, a liability is a present obligation to transfer assets or provide services that arises from a past transaction or event, and whose settlement is expected to require an outflow of resources. This means the obligation exists now because of something that already happened, and settling it will consume resources. It isn’t a potential, future-only obligation, nor is it an asset or a contingent asset. For example, amounts owed under a contract or a legal debt due for payment are liabilities because the entity is currently obligated to pay.

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