Question

multiple choice question
which of the following statements is accurate regarding accounts payable?

• accounts payable refer to amounts owed to the business by customers who purchased products on credit.
• accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services.
• accounts payable refer to deposits made by the business into their checking account.
• accounts payable are assets.

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Explanation:

• The first option describes accounts receivable, amounts owed to the business by customers.
• The third option refers to cash deposits, not accounts payable.
• Accounts payable are liabilities, amounts owed by the business, not assets, so the fourth option is incorrect.
• Only the second option correctly defines accounts payable as short-term obligations from credit purchases of supplies/services.

Answer:

Accounts payable refer to promises to pay later, which may arise from the purchase of supplies or services.