To be recorded as a liability, an item must meet three specific conditions. Two of...
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Accounting
To be recorded as a liability, an item must meet three specific conditions. Two of them are: it must involve probable future sacrifice of economic resources by the entity, and it must be a present obligation that arose as a result of a past transaction. Which one of the following is the third condition?
The item must reduce the market value of the recording entity
It must involve a transfer of resources to another entity
It must involve the expenditure of cash now or in the future
It must not cause total liabilities to exceed total assets
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