Which one of the following events creates a liability for a business?

Question

Quizplus · Accepted Answer

An obligation to pay for goods purchased on credit from a supplier creates a liability because the business owes money to the supplier and must eventually pay it back. The other options do not create liabilities: inventories purchased for cash and amounts invested by the owners are assets for the business, and stock sold to the general public is a form of equity financing that does not create a liability.

Which One of the Following Events Creates a Liability for a Business