Sarah runs a business as a sole trader.One of the items on the following list is a liability of her business.Which item is the liability?
A)Amount owing by one of Sarah's customers
B)Bank overdraft
C)Tax refund due from HMRC
D)Cash float kept in till

Question

Quizplus · Accepted Answer

A bank overdraft is a liability because it represents money that the business owes to the bank. The amount owing by a customer (A) is a receivable, not a liability. The tax refund due from HMRC (C) and the cash float kept in till (D) are both assets, not liabilities.

Sarah Runs a Business as a Sole Trader