The Liability Created by a Business When It Purchases Coffee

question 86

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:

Worksheet

An informal document used by accountants to prepare and adjust financial statements, summarizing a period's transactions, adjustments, and accounts.

Net Loss

The amount by which total expenses exceed total revenues, indicating a company is spending more than it is earning.

Net Income

A company's overall earnings once expenses and taxes are removed from its revenue.

Ending Inventory

The complete value of commodities being offered for sale upon the closing of a financial period.