{"id":184906,"date":"2025-01-21T18:28:56","date_gmt":"2025-01-21T18:28:56","guid":{"rendered":"https:\/\/learnexams.com\/blog\/?p=184906"},"modified":"2025-01-21T18:28:57","modified_gmt":"2025-01-21T18:28:57","slug":"which-of-the-following-represents-an-obligation-of-the-company","status":"publish","type":"post","link":"https:\/\/www.learnexams.com\/blog\/2025\/01\/21\/which-of-the-following-represents-an-obligation-of-the-company\/","title":{"rendered":"Which of the following represents an obligation of the company"},"content":{"rendered":"\n

Which of the following represents an obligation of the company? Multiple Choice Assets. Liabilities. Expenses. Dividends. Which body has the primary responsibility for the establishment of Generally Accepted Accounting Principles? 52F%252Fims.mheducation.co Savod Multiple Choice American Institute of Certified Public Accountants (AICPA) International Accounting Standards Board (ASB) Securities and Exchange Commission (SEC) Financial Accounting Standards Board (FASB). Bang<\/p>\n\n\n\n

The Correct Answer and Explanation is :<\/strong><\/mark><\/p>\n\n\n\n

Correct Answers:<\/h3>\n\n\n\n
    \n
  1. Liabilities<\/strong><\/li>\n\n\n\n
  2. Financial Accounting Standards Board (FASB)<\/strong><\/li>\n<\/ol>\n\n\n\n
    \n\n\n\n

    Explanation:<\/h3>\n\n\n\n

    1. Obligation of the Company: Liabilities<\/strong><\/h4>\n\n\n\n

    Liabilities represent the financial obligations or debts of a company that arise during its normal operations. These obligations could include loans, accounts payable, or other amounts the company owes to creditors or suppliers. Liabilities are listed on the balance sheet and are categorized as either current (to be settled within one year) or non-current (to be settled after more than one year).<\/p>\n\n\n\n

    Assets, on the other hand, are resources owned by the company, such as cash, inventory, or equipment, that are expected to generate economic benefits in the future. Expenses refer to the costs incurred by the company in its operations, while dividends represent payments made to shareholders from the company\u2019s earnings. None of these represent obligations.<\/p>\n\n\n\n

    2. Establishment of GAAP: FASB<\/strong><\/h4>\n\n\n\n

    The Financial Accounting Standards Board (FASB)<\/strong> holds the primary responsibility for establishing Generally Accepted Accounting Principles (GAAP)<\/strong> in the United States. GAAP is a set of standardized rules and guidelines used by companies to prepare their financial statements, ensuring consistency, transparency, and comparability. FASB, an independent private-sector organization, works in collaboration with various stakeholders, including businesses, investors, and regulators, to update and improve these principles.<\/p>\n\n\n\n

    The American Institute of Certified Public Accountants (AICPA)<\/strong> played a historical role in establishing accounting standards but relinquished this responsibility to the FASB in the 1970s. The International Accounting Standards Board (IASB)<\/strong> is responsible for developing International Financial Reporting Standards (IFRS), which are used in many countries outside the U.S. The Securities and Exchange Commission (SEC)<\/strong> oversees and enforces compliance with financial reporting standards but does not create GAAP.<\/p>\n","protected":false},"excerpt":{"rendered":"

    Which of the following represents an obligation of the company? Multiple Choice Assets. Liabilities. Expenses. Dividends. Which body has the primary responsibility for the establishment of Generally Accepted Accounting Principles? 52F%252Fims.mheducation.co Savod Multiple Choice American Institute of Certified Public Accountants (AICPA) International Accounting Standards Board (ASB) Securities and Exchange Commission (SEC) Financial Accounting Standards Board […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"default","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","ast-disable-related-posts":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"ast-content-background-meta":{"desktop":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[25],"tags":[],"class_list":["post-184906","post","type-post","status-publish","format-standard","hentry","category-exams-certification"],"_links":{"self":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/184906","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/comments?post=184906"}],"version-history":[{"count":0,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/posts\/184906\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/media?parent=184906"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/categories?post=184906"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.learnexams.com\/blog\/wp-json\/wp\/v2\/tags?post=184906"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}