BUSINESS ADMINISTRATION
MARKETING MANAGEMENT
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Question
[CLICK ON ANY CHOICE TO KNOW THE RIGHT ANSWER]
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An asset
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Owner’s equity
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A liability
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Capital
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Detailed explanation-1: -This account is recorded as a liability on the Balance Sheet as it is a debt owed by the company.
Detailed explanation-2: -Business liabilities are, by definition, the amounts owed by a business at any one time. They’re often expressed as “payables” for accounting purposes. Unless you’re running a complete cash business (paying and collecting only cash), your business probably has liabilities. Alternate name: payables.
Detailed explanation-3: -Examples of liabilities are bank loans, overdrafts, outstanding credit card balances, money owed to suppliers, interest payable, rent, wages and taxes owed, and pre-sold goods and services. In all cases, the business is indebted and that debt is recorded as a liability.
Detailed explanation-4: -A company’s obligation to pay money to other people or businesses in the future is called a liability.
Detailed explanation-5: -A liability is typically an amount owed by a company to a supplier, bank, lender or other provider of goods, services or loans. Liabilities can be listed under accounts payable, and are credited in the double-entry bookkeeping method of managing accounts.