An entity's economic obligations to nonowners are called ________.
A) owners' equity
B) liabilities
C) assets
D) retained earnings

Question

Quizplus · Accepted Answer

Liabilities are the economic obligations of an entity to non-owners, such as debts owed to creditors or obligations to pay salaries or taxes. Owners' equity represents the residual interest in the assets of the entity after deducting liabilities. Assets are the economic resources owned or controlled by an entity, and retained earnings represent the accumulated earnings of the entity that have not been distributed to owners as dividends.

An Entity's Economic Obligations to Nonowners Are Called ________