Most firms purchase from their suppliers on credit, recording these debts in their financial statements/accounts as ______.

Question

Quizplus · Accepted Answer

Accounts payable is the correct choice as it represents the amount owed to suppliers for goods or services purchased on credit. Notes payable and promissory notes are types of loans taken out by the firm, while inventory represents the goods or products held by the firm for sale. Accounts receivable, on the other hand, represents amounts owed to the firm by its customers.

Most Firms Purchase from Their Suppliers on Credit, Recording These