Which of the Following Best Describes a Liability? Liabilities Are

question 57

Multiple Choice

Which of the following best describes a liability? Liabilities are:

• A)a form of paid-in capital.
• B)future economic benefits to which a company is entitled.
• C)debts payable to outsiders called creditors.
• D)economic obligations to owners to be paid at some future date by the corporation.

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Definitions:

Internal Control

A system of policies and procedures implemented by an entity to ensure the integrity of financial and accounting information, promote accountability, and prevent fraud.

Policies and Procedures

Guidelines and processes set by an organization to ensure its operations comply with regulations and are consistent with its objectives.

NSF Check

A check that has been returned without being honored due to insufficient funds in the account it was drawn against.

Petty Cash Fund

A small amount of cash kept on hand for making immediate payments for miscellaneous, small expenses instead of writing checks.