Question

_______ falls under liabilities a/c.

• A. Creditors a/c
• B. Loan a/c
• C. Bank overdraft a/c
• D. All the three

Answer 1

Answer: (D)

All the three

Liabilities are obligations or debts that an enterprise has to pay at some time in the future. They represent creditor's claims on the firm's assets. Both small and big businesses find it necessary to borrow money at one time or the other. Long-term liabilities are those that are usually payable after a period of one year, for example, a term loan from a financial institution or debentures (bonds) issued by a company.

Short-term liabilities are obligations that are payable within a period of one year, for example, creditors, bills payable, bank overdraft, etc.