A liability that results from a purchase of goods or services on open account is referred to as a(n)
A)accounts receivable.
B)notes payable.
C)accounts payable.
D)notes receivable.
E)capital stock.

Question

Quizplus · Accepted Answer

Accounts payable refers to a debt owed by a company for goods or services purchased on credit or open account. Accounts receivable (A) refers to money owed to a company by its customers, while notes payable (B) and notes receivable (D) refer to debts that are backed by a formal written agreement (a note). Capital stock (E) refers to the total value of shares of stock that a company has issued.

A Liability That Results from a Purchase of Goods or Services