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

In financial accounting, what is the term for a person or business to whom a liability is owed?

Owner

Creditor

Investor

Debtor

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Verified step by step guidance

Step 1: Understand the concept of liability in financial accounting. A liability is an obligation or debt that a business owes to another party, typically arising from past transactions or events.

Step 2: Review the definitions of the terms provided in the options: Owner, Creditor, Investor, and Debtor. Each term has a specific meaning in financial accounting.

Step 3: Focus on the term 'Creditor.' A creditor is a person or business to whom a liability is owed. This is because the creditor has provided goods, services, or loans to the business, creating an obligation for repayment.

Step 4: Compare the term 'Creditor' with the other options: 'Owner' refers to the individual or entity that owns the business, 'Investor' refers to someone who invests capital into the business, and 'Debtor' refers to a person or business that owes money to another party.

Step 5: Conclude that the correct term for a person or business to whom a liability is owed is 'Creditor,' as it aligns with the definition of liabilities in financial accounting.