A liability is properly accounted for as an account payable if
A) the amount is known and owed as of the balance sheet date.
B) the amount can be estimated and is owed at the balance sheet date.
C) the amount is known at the balance sheet date and owed by the end of the next fiscal year.
D) the amount is estimated and owed within 90 days of the balance sheet date.

Question

Quizplus · Accepted Answer

A liability is properly accounted for as an account payable only if the amount is known and owed as of the balance sheet date. If the amount can be estimated, it is recorded as a accrued liability, and if the liability is not due within a year, it is recorded as a long-term liability. Only option A meets the criteria given in the question.

A Liability Is Properly Accounted for as an Account Payable