Liabilities are best defined as:
A)Amounts the company expects to collect in the future from customers.
B)Debts or obligations the company owes resulting from past transactions.
C)The amounts that owners have invested in the business.

Question

Quizplus · Accepted Answer

Liabilities are debts or obligations that a company owes resulting from past transactions such as loans, accounts payable, taxes owed, or salaries payable. The other options, A and C, do not fit the definition of liabilities. Amounts expected to be collected from customers in the future are accounts receivable, while the amount owners have invested in the business is referred to as equity or capital.

Liabilities Are Best Defined As