Which of the following is classified as a liability?
A) Wages expense
B) Accounts payable
C) Owners' drawings
D) Retained profits

Question

Quizplus · Accepted Answer

Accounts payable is a liability because it represents an amount owed by the business to its creditors for goods or services received but not yet paid for. Wages expense (A) represents an expense incurred by the business, Owners' drawings (C) represents withdrawals made by the owner(s) of the business and Retained profits (D) represents the amount of earnings that have been retained by the business and not distributed to the owner(s) as dividends.

Which of the Following Is Classified as a Liability