l . Which of the following does the Conceptual Framework regard as essential characteristics of a liability?

1. It is a present obligation

ii. Must involve an inflow of economic resources

iii. Where it is probable there is a future outflow of economic resources from an entity

iv. The amount of the settlement of the obligation can be measured reliably

1. i, ii and iv only
2. i, iii and iv only
3. iii and iv only
4. i, ii, iii and iv

2. When a company incurs employees' salaries but does not pay them, how will the basic accounting equation be affected? A. Shareholders' equity decreases.
   2. Revenues decrease.
   3. Expense decrease. D. Liabilities decrease.
3. The qualitative characteristic that says accounting information is presented clearly and concisely based on certain formats with accompanying notes is: A. Timeliness.

B. Verifiability. C Understandability. D. Comparability.

4. The following will be capital expenditures that will add to the value of a non-current asset except:
   1. Putting a new roof on a building.
   2. Installing a new energy-saving air-conditioning system. C. Building new custom shelving and cabinets into rental units.

D. Re-painting of a building.