Question

What liability is always a current liability, representing balances owed to others for goods, supplies, or services purchased on open account and resulting from timing differences between receipt of goods or services and payment for them?

Answer 1

Accounts payable is a current liability representing balances owed to others for goods, supplies, or services purchased on open account and resulting from timing differences between receipt of goods or services and payment for them.

Step-by-step explanation:

Current liabilities that represent balances owed to others for goods, supplies, or services purchased on open account and resulting from timing differences between receipt of goods or services and payment for them are referred to as accounts payable.

Accounts payable is listed as a current liability in a balance sheet, which is an accounting tool that lists a company's assets and liabilities.

For example, if a company buys inventory on credit, the amount owed to the supplier for the inventory purchased would be recorded as an accounts payable liability until the payment is made.