Which of the Following Statements Is Not True About Liabilities

question 6

Multiple Choice

Which of the following statements is not true about liabilities?

• A) Liabilities are debts owed to outsiders.
• B) Account titles of liabilities often include the term "payable".
• C) Cash received before services are performed are considered to be liabilities.
• D) Liabilities do not include wages owed to employees of the company.

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Definitions:

Fixed Costs

Expenses that do not change with the level of production or sales, such as rent, salaries, or insurance premiums.

Variable Cost

Costs that vary directly with the level of production or sales volume, such as materials and labor.

Target Profit

The desired level of profit a company aims to achieve within a specific time frame.

Variable Costs

Costs that change in proportion to the level of goods or services that a business produces.