ACC309 Quiz on Current Liabilities (Theories) 

A provision shall be recognized as liability when 

a. The amount of the obligation can be measured reliably. 
b. An entity has a present obligation as a result of a past event. 
c. All of these are required for the recognition of a provision as liability. 
d. It is probable that an outflow of resources embodying economic benefits will be required
to settle the obligation. 
A legal obligation is an obligation that is derived from all of the following, except
a. Other operation of law 
b. Legislation 
c. An established pattern of past practice 
d. A contract 
When the provision arises from a single obligation, the estimate of the amount 
a. Reflects the weighting of all possible outcomes by their associated probabilities.
b. Is determined as the individual most likely outcome. 
c. Is the individual most likely outcome adjusted for the effect of other possible outcomes. 
d. Midpoint of the possible outcomes.