Multiple Choice
Which of the following is typically used by borrowers to secure a mortgage loan?
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9. Current Liabilities
Types of Liabilities
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Salaries owed but not yet paid is an example of which of the following types of liabilities?
A
Notes payable
B
Deferred revenue
C
Accrued liabilities
D
Long-term debt
Verified step by step guidance1
Understand the concept of accrued liabilities: These are expenses that have been incurred but not yet paid by the company. They are recorded as liabilities on the balance sheet because the company owes money for these expenses.
Identify the nature of salaries owed but not yet paid: Salaries are a type of expense that employees have earned for their work, but the company has not yet disbursed the payment.
Compare accrued liabilities with other types of liabilities: Notes payable refers to written promises to pay a specific amount, deferred revenue refers to payments received for goods or services not yet delivered, and long-term debt refers to obligations due after more than one year. Salaries owed do not fit these categories.
Classify salaries owed but not yet paid as accrued liabilities: Since the company has incurred the expense but has not yet paid it, this fits the definition of accrued liabilities.
Conclude that salaries owed but not yet paid are an example of accrued liabilities, as they represent obligations for expenses already incurred but not yet settled.
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Types of Liabilities practice set
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