What Is an Accounts Payable

question 185

Multiple Choice

What is an accounts payable?

• A)It is a liability for goods or services purchased on credit and supported by a written agreement.
• B)It is a liability for goods or services purchased on credit and supported by the credit standing of the purchaser.
• C)It is an amount of money to be received from a supplier.
• D)It is an asset arising from the sale of goods or services on credit.

---

Definitions:

Stock Securities

Equities or shares in corporations, representing a fraction of ownership in the company; these can provide dividends and potential appreciation in value to its holders.

Long-Term Investment

Investments in securities or other assets that are intended to be held for several years or more.

Cash Dividends

Payments made by a corporation to its shareholders as a distribution of profits, typically in cash form, reflecting the company's profitability.

Cost Method

An accounting method used for investments, where the investment is recorded at its acquisition cost and adjustments are made for dividends received and changes in fair value are not recorded.