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 type of liability is described as a loan with an asset attached to it that belongs to the lender until the debt is paid?

Secured liability

Contingent liability

Current liability

Unsecured liability

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Verified step by step guidance

Understand the concept of liabilities: Liabilities are obligations that a company owes to external parties, typically involving the repayment of money or services.

Learn about secured liabilities: A secured liability is a loan or obligation that is backed by an asset. The lender has a legal claim to the asset until the debt is fully repaid.

Compare secured liabilities with other types: Contingent liabilities depend on future events, current liabilities are short-term obligations due within a year, and unsecured liabilities are not backed by any asset.

Identify the key characteristic in the problem: The question specifies that the loan has an asset attached to it, which belongs to the lender until the debt is paid. This matches the definition of a secured liability.

Conclude that the correct answer is 'Secured liability' based on the description provided in the problem.