Which one of the following is an economic obligation for a business entity?
A)Salaries paid to employees for services rendered
B)Materials used in manufacturing products
C)Amounts owed to creditors
D)Payment of rent for the next year

Question

Quizplus · Accepted Answer

Economic obligations refer to the liabilities or debts that a business entity owes to its creditors. Amounts owed to creditors are a prime example of economic obligations. Salaries, materials, and rent are expenses or costs incurred by the business entity but they do not necessarily represent economic obligations.

Which One of the Following Is an Economic Obligation for a Business