The Liability Created by a Business When It Purchases Coffee

question 44

Multiple Choice

The liability created by a business when it purchases coffee beans and coffee cups on credit from suppliers is called a(n)

• A)account payable.
• B)account receivable.
• C)revenue.
• D)expense.

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Definitions:

Performance

The act of fulfilling the duties or requirements specified in a contract or agreement.

Incidental Beneficiary

A third party who might receive a benefit from a contract between two other parties, although the contract is not primarily intended for the benefit of the third party.

Assignee

A person or entity to whom a contract or legal right is transferred.

Statute of Frauds

A legal concept that requires certain types of contracts to be executed in writing and signed by all parties to be legally enforceable.