Accounts payable is considered a
A) spontaneous liability.
B) temporary financing source.
C) permanent financing source.
D) both A and B.

Question

Quizplus · Accepted Answer

Accounts payable is considered a spontaneous liability because it arises naturally from the operations of the business, such as purchasing inventory on credit. It is also seen as a temporary financing source because it is a short-term obligation that the company is expected to pay off within a year or the operating cycle, whichever is longer.

Accounts Payable Is Considered a