The Claims of Creditors Against the Assets of a Business

question 95

Multiple Choice

The claims of creditors against the assets of a business are

• A) expenses.
• B) revenues.
• C) liabilities.
• D) owner's equity.

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Definitions:

Accounts Receivable

Money owed to a business by its customers for goods or services that have been delivered but not yet paid for.

Inventory

The raw materials, work-in-process, and finished goods that are considered to be the portion of a business's assets that are ready or will be ready for sale.

Accounts Payable

Money owed by a company to its creditors for goods and services that have been received but not yet paid for.

Prepaid Expenses

The payments the company has already made for services not yet received.