Liabilities are:
A) resources under an organisation's legal control.
B) obligations owed by an organisation to its suppliers of goods and services on credit creditors.
C) the amount of investment made by owners in a business.
D) the profits earned by a corporation.

Question

Quizplus · Accepted Answer

Liabilities refer to the obligations that an organization owes to its creditors, suppliers, and lenders. These may include loans, unpaid bills, accrued expenses, and other debts that have yet to be paid. Option A is incorrect because resources refer to assets. Option C is incorrect because the amount of investment made by owners in a business is called owner's equity. Option D is incorrect because profits refer to revenues minus expenses, and are not liabilities.

Liabilities Are