CameraIcon
CameraIcon
SearchIcon
MyQuestionIcon
MyQuestionIcon
1
You visited us 1 times! Enjoying our articles? Unlock Full Access!
Question

Which one of the following items would fall under the definition of a liability?

A
Cash
No worries! We‘ve got your back. Try BYJU‘S free classes today!
B
Debtor
No worries! We‘ve got your back. Try BYJU‘S free classes today!
C
Owner's equity
Right on! Give the BNAT exam to get a 100% scholarship for BYJUS courses
D
None of these
No worries! We‘ve got your back. Try BYJU‘S free classes today!
Open in App
Solution

The correct option is C Owner's equity
Separate entity concept defines that owner and the business both are separate legal entity. Accordingly, owner is treated as the creditors of the business.
Capital contributed by the owner is a liability for the business and to be shown in balance sheet.

flag
Suggest Corrections
thumbs-up
0
Join BYJU'S Learning Program
similar_icon
Related Videos
thumbnail
lock
Sole Proprietorship and Partnership
BUSINESS STUDIES
Watch in App
Join BYJU'S Learning Program
CrossIcon