Question

Susan, who is a florist, purchases her flowers on credit. Lucy, a customer, takes eight bouquets and promises to pay Susan within two weeks. The amount that Lucy owes Susan is termed _____.

A. receivables
B. deposits
C. charge backs
D. payables

Answer 1

The term that describes the amount Lucy owes Susan is payables. Payables are debts owed by a business to its suppliers or creditors for goods or services received on credit.

Step-by-step explanation:

The amount that Lucy owes Susan is termed payables. Payables are debts owed by a business to its suppliers or creditors for goods or services received on credit. In this case, Susan is the supplier and Lucy owes her for the bouquets she took on credit.

When Susan purchased the flowers on credit, she incurred a liability to the supplier/store she bought the flowers from. This liability is known as a payable, as Susan will need to pay the supplier/store for the flowers at a later date.

Payables are recorded as liabilities on a business' balance sheet, as they represent outstanding amounts owed by the business to its creditors.