Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

9. Current Liabilities

Types of Liabilities

Financial Accounting

9. Current Liabilities

Types of Liabilities

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Multiple Choice

Which of the following is a liability account?

Accounts Payable

Equipment

Prepaid Expenses

Service Revenue

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Verified step by step guidance

Understand the definition of a liability account: A liability account represents obligations or debts that a company owes to external parties, which are expected to be settled in the future, typically through the transfer of cash, goods, or services.

Review the options provided: Accounts Payable, Equipment, Prepaid Expenses, and Service Revenue. Identify which of these represents an obligation or debt.

Analyze 'Accounts Payable': This account records amounts owed by the company to suppliers for goods or services received but not yet paid for. It is a classic example of a liability account.

Analyze the other options: 'Equipment' is an asset account representing physical items owned by the company. 'Prepaid Expenses' is also an asset account, representing payments made in advance for future expenses. 'Service Revenue' is a revenue account, representing income earned from providing services.

Conclude that 'Accounts Payable' is the correct answer because it meets the definition of a liability account, while the other options represent assets or revenue.