$1\mathrm{.}2$ Provide the definition of a liability and briefly describe the three criteria for showing a

liability in the financial statements. $(6)$

$1\mathrm{.}3$ Financial statements are prepared and presented under the assumption that the entity is

going to continue into the foreseeable future. What is this assumption commonly known

as and what is its significance? $(3)$

$1\mathrm{.}4$ Briefly describe the two fundamental qualitative characteristics as identified in the

conceptual framework. Also list two qualities that enhance the two fundamental

characteristics.