Accounts payable typically arise because
A)cash is received from a customer that will be paid back in the future.
B)cash is received from customers prior to the rendering of services or delivery of products.
C)the firm temporarily borrows cash for operations.
D)amounts are owed to others for goods, supplies, and services purchased on open account.

Question

Quizplus · Accepted Answer

Accounts payable arise when a company owes money to suppliers or vendors for goods, supplies, or services that have been purchased on open account. It is a liability that needs to be paid off in the future. Option A refers to accounts receivable, option B is prepayment received from customers, and option C refers to borrowing for operations.

Accounts Payable Typically Arise Because