Which of the following is incorrect about liabilities according to the conceptual framework?

1. "For the liability definition to be met, there needs to be a present obligation."
2. "An obligation may arise based on notions of equity and fairness, referred to as equitable obligation. "
3. "For an obligation to exist, it has to be a legal obligation."
4. "An obligation may arise based on customary practices, published policies or particular statements, referred to as constructive obligation, if the entity has no practical ability to avoid complying."
   
   "According to the new conceptual framework, which of the following statements is true?"

1. Enhancing qualitative characteristics distinguish more useful information from less useful information.
2. All of the statements are true.
3. The enhancing qualitative characteristics enhance the decision-usefulness of financial reporting information that is relevant and faithfully represented.
4. "The enhancing qualitative characteristics are comparability, verifiability, timeliness and understandability. "

Answer rating: 100% (QA)

1 Incorrect statement is An obligation may arise based on notions of equity and fairn... View the full answer