Multiple Choice
Fixed costs that usually arise from annual spending decisions by management are called:
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9. Current Liabilities
Types of Liabilities
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Which of the following types of liabilities are amounts owed to suppliers for products or services purchased on credit?
A
Accrued Expenses
B
Notes Payable
C
Accounts Payable
D
Unearned Revenue
Verified step by step guidance1
Understand the concept of liabilities: Liabilities are obligations that a company owes to external parties, typically arising from past transactions or events.
Review the definition of Accounts Payable: Accounts Payable refers to amounts owed to suppliers for products or services purchased on credit. It is a current liability recorded on the balance sheet.
Compare Accounts Payable with other liability types: Accrued Expenses are liabilities for expenses incurred but not yet paid, Notes Payable are formal written promises to pay a certain amount, and Unearned Revenue represents payments received before delivering goods or services.
Identify the correct match: Since the question specifies amounts owed to suppliers for products or services purchased on credit, Accounts Payable is the correct type of liability.
Conclude the reasoning: Accounts Payable is the appropriate answer because it directly corresponds to the description provided in the question.
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