Which Is an Example of a Liability

question 69

Multiple Choice

Which is an example of a liability?

• A)The decision to borrow $150,000 from the ABC Bank on January 15,2012.
• B)Withdrawing $10,000 from the operating line of credit on January 15,2012.
• C)Selecting the supplier to provide the raw materials for the manufacturing process.
• D)Choosing the site for a future plant expansion from a list of several possible choices.

---

Definitions:

Straight-Line Depreciation

Straight-line depreciation is a method of allocating the cost of a tangible asset over its useful life in equal annual amounts.

Capital Budgeting

The strategy of organizing and overseeing a business's extended investments in ventures and assets.

Straight-Line Depreciation

A technique for spreading the expense of a physical asset across its lifespan in uniform yearly payments.

Income Tax Expense

The amount of money a company sets aside to pay its income tax obligations for the year.