Accounts payable is usually the smallest current liability on the balance sheet and a
insignificant factor in the evaluation of an entity's short-term solvency, especially when the
accounts payable is affected by a high volume of transactions and thus is susceptible to
misstatements.

Question

Quizplus · Accepted Answer

This statement is false. Accounts payable is a significant current liability on the balance sheet and plays an important role in evaluating an entity's short-term solvency. Additionally, while accounts payable can be susceptible to misstatements, proper controls and processes can minimize the risk of errors.

Accounts Payable Is Usually the Smallest Current Liability on the Balance