What is the liability arising from the purchase of goods or services on credit?Group of answer choicesA. CreditB. Accounts payableC. LoanD. Accounts receivable
Question
What is the liability arising from the purchase of goods or services on credit?Group of answer choicesA. CreditB. Accounts payableC. LoanD. Accounts receivable
Solution
The liability arising from the purchase of goods or services on credit is B. Accounts payable. This is because when a company purchases goods or services on credit, it does not pay cash immediately. Instead, the company records the amount as accounts payable, which is a liability on its balance sheet. The company is obligated to pay this liability in the future.
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