Which one of the following is an economic obligation for a business entity?
A)Salaries paid to employees for services rendered
B)Amounts owed to creditors
C)Materials used in manufacturing products
D)Payment of rent for the next year

Question

Quizplus · Accepted Answer

Economic obligation refers to the debts or liabilities a business entity has to pay. Amounts owed to creditors represent the liabilities of the business and therefore, is the economic obligation for a business entity. The other options are expenses of the business but not obligations to pay debts.

Which One of the Following Is an Economic Obligation for a Business