What is the final step in the SABRS transaction cycle?

• A. Liquidation
• B. Initiation
• C. Obligation
• D. Expense

Answer: (A)

In SABRS, the cycle of a financial transaction moves from creating the record, to setting aside funds, and then closing out the obligation. The last action is liquidation because it discharge(s) the funded liability and completes the financial transaction. When liquidation occurs, the obligation is reconciled against a valid payment or disbursement, and the liability is cleared from the books. This step effectively marks the closing of that funding event in the system, making the record ready for any subsequent accounting entries that recognize the actual cost.

Think of it this way: initiation starts the process, obligation commits the funds, and liquidation finishes the cycle by resolving the liability. Expense, while related, is the recognition of the cost in the accounting records and follows after the obligation has been liquidated.