Multiple Choice
Which one of the following fixed assets is not depreciated?
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9. Current Liabilities
Types of Liabilities
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Which of the following best completes the sentence: '______ are amounts owed to suppliers for products or services purchased on credit.'?
A
Notes Payable
B
Accounts Payable
C
Unearned Revenue
D
Accrued Expenses
Verified step by step guidance1
Understand the concept of 'Accounts Payable': Accounts Payable refers to amounts owed by a company to its suppliers for goods or services purchased on credit. It is a liability recorded on the balance sheet.
Review the other options provided: Notes Payable refers to written promissory notes for loans or debts, Unearned Revenue refers to money received before delivering goods or services, and Accrued Expenses are expenses incurred but not yet paid.
Identify the key phrase in the question: 'amounts owed to suppliers for products or services purchased on credit.' This directly aligns with the definition of Accounts Payable.
Eliminate incorrect options based on their definitions: Notes Payable, Unearned Revenue, and Accrued Expenses do not match the description provided in the question.
Conclude that the correct answer is 'Accounts Payable' as it best fits the description of amounts owed to suppliers for credit purchases.
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