Which of the Following Statements Regarding Accounts Payable Is False

question 141

Multiple Choice

Which of the following statements regarding accounts payable is false?

• A)Accounting for accounts payable is really just the flip side of accounts receivable.
• B)Accounts payable arise when a business purchases goods or services on credit.
• C)Accounts payable arise when a business promises to purchase goods or services in the future.
• D)Accounts payable seldom require the payment of interest.

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Definitions:

Variable Costs

Costs that change in proportion to the level of activity or production volume, such as materials and labor.

Fixed Costs

Fixed costs are business expenses that remain constant regardless of the level of production or sales activities.

Contribution Margin

The difference between a company's sales revenue and its variable costs, used to cover fixed costs and generate profit.

Variable Cost

A corporate expense that changes in proportion with production output, such as raw materials and labor costs, differing from fixed costs.