3. Which of the following is an example of 'External Liability'?
a. Equity Share Capital
.
c. Share Premium
b. Creditors
d. General Reserve
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Answer:
creditors
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A creditor is an example of external liability. (option b)
- External liabilities are payable to outsiders.
- This arises due to taking loans and credits. For example bank loans or usage of credit cards etc.,
- Usually, a business owing money to outsiders is known as external liability. They are called creditors.
- The other options do not match the meaning of external liability.
- Therefore, the correct answer is option b creditors.
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