Which of the following statements is not true about liabilities?
A) Liabilities are debts owed to outsiders.
B) Account titles of liabilities often include the term "payable."
C) Cash received before a service is performed creates a liability.
D) Liabilities include accumulated depreciation.

Question

Quizplus · Accepted Answer

Liabilities do not include accumulated depreciation. Accumulated depreciation is a contra-asset account that reduces the book value of assets and is listed as a separate line item on the balance sheet. Liabilities represent future obligations to pay or deliver goods or services in the future.

Which of the Following Statements Is Not True About Liabilities