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

Question

Quizplus · Accepted Answer

An economic obligation for a business entity is any amount owed to creditors or suppliers for goods and services received. Options A and B are expenses incurred by the business entity, but not necessarily obligations. Option D may be a future expense, but it is not an obligation until the time of payment.

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