Which of the following best describes the liabilities of an enterprise?
A) What the enterprise has been invoiced for
B) Everything that the enterprise owes to anybody
C) Everything that the enterprise owes to the owners
D) Everything that the enterprise owes to anybody other than the owners

Question

Quizplus · Accepted Answer

Liabilities refer to everything that the enterprise owes to anybody other than its owners. This includes debts, accounts payable, taxes owed, and other obligations. Choice A is incorrect as it only refers to what the enterprise has been invoiced for, which may not include all liabilities. Choice B is too broad as it includes liabilities to the owners, which are not considered liabilities in accounting terms. Choice C is incorrect as it only refers to liabilities owed to the owners, not to other parties.

Which of the Following Best Describes the Liabilities of an Enterprise