When Morgan Hardware Stores orders two cases of paint from their supplier Sherwin-Williams on credit,the paint store has created for itself a/an:
A) notes payable
B) accounts payable
C) notes receivable
D) long-term liability
E) accounts receivable

Question

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When Morgan Hardware Stores orders paint from their supplier Sherwin-Williams on credit, they have received the goods but have not yet paid for them. This creates an accounts payable for Sherwin-Williams, which is a liability for Morgan Hardware Stores. A notes payable (A) is a liability created when a company borrows money and promises to repay it at a specified time. Notes receivable (C) is an asset created when a company lends money to someone and receives a promissory note to repay. Long-term liabilities (D) are debts that have a maturity of more than one year. Accounts receivable (E) is an asset created when a company sells goods or services on credit and expects to receive payment in the future.

When Morgan Hardware Stores Orders Two Cases of Paint from Their