Question

Clara's label owes certain debts to the Small Business Administration and her suppliers. In accounting, these debts are known as ___.

a) Accounts payable
b) Accounts receivable
c) Equity
d) Assets

Answer 1

In accounting, Clara's debts to the Small Business Administration and her suppliers are classified as 'accounts payable,' which is term a) from the given options. This term represents the liabilities listed on the right side of a T-account. option a is answer

Step-by-step explanation:

The debts owed by Clara's label to the Small Business Administration and her suppliers are known in accounting as liabilities. The correct answer to the given question is a) Accounts payable.

This term is used to describe the money that a company owes to its creditors for goods or services that have been received, but not yet paid for. In the context of a T-account, which is a graphical representation of a general ledger account, liabilities are placed on the right side. Assets would be placed on the left side of the T-account

A bank, for example, would list reserves, loans made to customers, and U.S. Government Securities, such as U.S. Treasury bonds, under assets; while its liabilities would include deposits from customers and other debts. Net worth is calculated by deducting total liabilities from total assets and is included on the liabilities side to balance the T-account out to zero. option a is answer