Multiple Choice
Accounts payable appear on which of the following financial statements?
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1. Introduction to Accounting
The Financial Statements
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Accounts payable will appear on which of the following financial statements?
A
Statement of Cash Flows
B
Balance Sheet
C
Income Statement
D
Statement of Retained Earnings
Verified step by step guidance1
Understand the nature of accounts payable: Accounts payable represents the amount a company owes to its suppliers for goods or services received but not yet paid for. It is a liability.
Identify the financial statement that reports liabilities: The Balance Sheet is the financial statement that reports a company's assets, liabilities, and equity at a specific point in time.
Determine the classification of accounts payable: Since accounts payable is a liability, it will be listed under the 'Liabilities' section of the Balance Sheet.
Eliminate other financial statements: The Income Statement reports revenues and expenses, the Statement of Retained Earnings shows changes in retained earnings, and the Statement of Cash Flows tracks cash inflows and outflows. None of these directly report liabilities like accounts payable.
Conclude that accounts payable appears on the Balance Sheet, as it is a liability that reflects the company's obligations to creditors.
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