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 an example of a liability on a financial statement?

Inventory

Retained Earnings

Accounts Payable

Sales Revenue

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Verified step by step guidance

Understand the concept of a liability: A liability is an obligation that a company owes to external parties, typically arising from past transactions or events. It represents amounts that must be paid in the future, such as debts or obligations.

Review the options provided: Inventory, Retained Earnings, Accounts Payable, and Sales Revenue. Determine which of these fits the definition of a liability.

Analyze Inventory: Inventory is an asset, not a liability. It represents goods available for sale or raw materials used in production.

Analyze Retained Earnings: Retained Earnings are part of equity, not a liability. They represent the portion of net income that is retained by the company rather than distributed as dividends.

Analyze Accounts Payable: Accounts Payable is a liability because it represents amounts owed by the company to suppliers for goods or services received but not yet paid for. This matches the definition of a liability.