Liabilities are defined as:
A)Resources owed by an entity as a result of past transactions.
B)Resources owned by an entity as a result of past transactions.
C)Selling products and services to customers in the current period.

Question

Quizplus · Accepted Answer

Liabilities are obligations or debts owed by an entity to others as a result of past events or transactions, such as loans, accounts payable, or salaries payable. Therefore, option A, "Resources owed by an entity as a result of past transactions," is the correct definition of liabilities. Option B, "Resources owned by an entity as a result of past transactions," refers to assets, not liabilities. Option C, "Selling products and services to customers in the current period," is not the definition of liabilities, but rather refers to revenue or sales.

Liabilities Are Defined As