Which of the Following Statements Regarding Accounts Payable Is Incorrect

question 185

Multiple Choice

Which of the following statements regarding Accounts Payable is incorrect?

• A) The Accounts Payable account is decreased with a credit.
• B) Accounts payable occur because the business receives the goods or services before payment has been made.
• C) Because accounts payable are typically due in 30 days, they are current liabilities.
• D) Accounts payable represent debts owed to creditors.

---

Definitions:

Common Fixed Expenses

Costs that do not vary with the level of production or sales and are shared across different parts of a business, such as corporate office expenses.

Divisional Segment Margin

A financial metric that measures the profit or loss generated by a specific division or business segment, assessing its contribution to the overall company performance.

Common Fixed Expenses

Expenses that do not vary with the level of production or sales, and are shared by more than one segment or department within an organization.

Net Operating Income

Income from operations before interest and taxes, reflecting the profitability of a company's core business activities.