Match each of the following terms pertaining to liabilities to their definitions.
-Amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.
A)Current liability
B)Accounts payable
C)Notes payable
D)Discount on notes payable
E)Current maturities of long-term liabilities
F)Accrued liabilities
G)Contingent liability
H)Estimated liability

Question

Quizplus · Accepted Answer

Accounts payable refers to amounts owed for the purchase of inventory, goods, or services acquired in the normal course of business.

Answer: C 
 Notes payable refers to amounts owed for borrowing money that are typically long-term liabilities.

Answer: D 
 Discount on notes payable refers to the difference between the face value of a note payable and the amount received from the lender, which indicates the effective interest rate of the borrowing.

Answer: E 
 Current maturities of long-term liabilities refer to the portion of long-term debts that must be paid within the next year, which are classified as current liabilities.

Answer: F 
 Accrued liabilities refer to expenses that have been incurred but not yet paid or recorded, such as wages, interest, or taxes.

Answer: G 
 Contingent liabilities refer to potential future obligations that may or may not occur depending on certain events, such as pending lawsuits or warranties.

Answer: H 
 Estimated liabilities refer to future obligations that can be reasonably estimated based on past events and experiences, such as pension obligations or environmental cleanup costs.

Match Each of the Following Terms Pertaining to Liabilities to Their