Which of the following is not a characteristic of a liability?

A) It involves a responsibility to another company.
B) The company has little or no discretion to avoid the future sacrifice.
C) The sacrifice contributes directly or indirectly to the company's future cash inflows.
D) The transaction obligating the company has already occurred.

Future Sacrifice

An expected loss of economic benefits due to commitments or obligations a business has entered into.

Liability

A financial obligation or debt owed by a business to another entity, typically due for repayment in the future.

Company

A legal entity formed by individuals, stockholders, or shareholders, with the purpose of operating for profit.