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Which of the following is a type of liability?

A. a revenue stream.
B. a liquid asset.
C. accounts payable.
D. accounts receivable

User Evil Otto
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1 Answer

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Final answer:

Accounts payable is a type of liability, which is a debt or obligation that a company owes and must repay. Liabilities, alongside assets, are recorded on a balance sheet, and for a bank, the difference between assets and liabilities is referred to as bank capital. The correct option is C. accounts payable.

Step-by-step explanation:

Among the options given, accounts payable is a type of liability. A liability is defined as a debt or something that you owe.

For example, when a company borrows money, whether from a bank or through suppliers via credit terms, it creates a financial obligation that it must pay back in the future.

These obligations are recorded on the balance sheet. On the other hand, an asset is something of value that a firm or an individual owns, such as cash or a home.

When considering a bank's balance sheet, an understanding of the asset-liability time mismatch is important. Customers can withdraw a bank's liabilities, such as deposits, in the short term while the bank's loans, its assets, are repaid over a longer term. The bank's net worth, known as bank capital, is the difference between its assets and liabilities. The correct option is C. accounts payable.

User Raja Selvaraj
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