Which of the following is a liability?
Correct answer: D. Creditors
- A. Cash
- B. Equipment
- C. Debtors
- D. Creditors
Explanation
Creditors are amounts owed to suppliers and therefore represent a liability. Cash, equipment, and debtors are assets because they provide resources or claims to the business.
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About Accounting Principles
Accounting principles explain the rules used to record, classify and report business transactions. Coverage includes the accounting equation, double-entry system, accrual and cash bases, matching and prudence concepts, consistency, going concern, business entity, and the difference between capital and revenue items.
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