Which of the following statements is correct?
A)When a future expense is paid in advance,the payment is normally recorded in a liability account called Prepaid Expense.
B)Promises of future payment are called accounts payable.
C)Increases and decreases in cash are always recorded in the retained earnings account.
D)An account called Land is commonly used to record increases and decreases in both the land and buildings owned by a business.
E)Liabilities include accounts receivable.

Question

Quizplus · Accepted Answer

Promises of future payment are called accounts payable, which are liabilities representing amounts a company owes to suppliers or creditors.

Which of the Following Statements Is Correct