Which of the Following Statements Is Not True About Liabilities

question 46

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) Receiving cash before a service is performed creates a liability.
• D) Liabilities do not include wages owed to employees of the company.

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Definitions:

Personal Resources

Various assets or capabilities an individual possesses, including skills, time, and financial resources.

Income Sharing Ratios

The proportion of profits or losses distributed among partners in a partnership according to their agreement.

Capital Balances

The amount of capital that remains in a business after all liabilities have been subtracted from assets and capital contributions.

Remaining Capital Balances

The portion of a company's capital that remains after accounting for expenses, withdrawals, and any losses.