Question

Liabilities will increase by:

(a) Purchasing goods on credit (b) Taking loan from bank

(c) Rent due (d) All of these​

Answer 1

Answer:

Option  (d) All of these is the correct option.

Step by Step answer:

The money for the goods needs to be paid sooner or later. The money needs to be returned to the bank. The rent is need to be given to the landlord/landlady.

Answer 2

1. Liabilities are legally binding obligations to pay money to a third party.
2. Liability settlement can be performed through the transfer of money, goods, or services.
3. A credit raises an obligation, whereas a debit diminishes it.
4. Because an amount due to a third party is effectively borrowed cash that may later be utilised to support a business's asset base, a liability can be regarded a source of finances.
5. Accounts payable, accrued liabilities, deferred revenue, interest due, notes payable, taxes payable, and salaries payable are all examples of liabilities.
6. Thus,  liabilities will increase as a result of goods on credit purchases, bank loans, and unpaid rent.

Hence, option D is correct.

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