Creditors' claims on a firm, which are the financial obligations of the business.
A) Income
B) Assets
C) Equity
D) Liabilities

Question

Quizplus · Accepted Answer

Liabilities represent the financial obligations of a business, which includes creditors' claims on the firm. Assets represent what the business owns, income represents the revenue generated by the business, and equity represents the residual value of the business after all its liabilities have been paid off.

Creditors' Claims on a Firm, Which Are the Financial Obligations