Accounts payable represent money that a firm owes to ________.

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BlackTom AI · Accepted Answer

The question asks: Accounts payable represent money that a firm owes to ________.

Given the standard definition in accounting, accounts payable are obligations a business has due to its suppliers for goods or services purchased on credit. This reflects short-term liabilities arising from credit terms extended by vendors.

Option consideration:
- If the available choices include suppliers or vendors, that would be the correct target of accounts payable, since the liability arises from purchases on credit from those parties.
- If a choice suggested customers, this would be incorrect because amounts owed to customers are typically classified as accounts receivable (a contra asset) rather than accounts payable.
- If a choice suggested lenders or banks, that would refer to notes payable or other debt obligations, not the standard accounts payable arising from supplier credit.
- If a choice suggested internal departments or intercompany transfers, that would pertain to interdepartmental or intercompany reconciliations, not externally owed supplier obligations.

Note: The provided data includes an answer field stating "suppliers for purchases made on credit" and an empty answer_options list. While the explicit options to evaluate are not enumerated here, the canonical correct interpretation is that accounts payable represent amounts owed to suppliers for purchases made on credit. The distinction hinges on external vendors versus internal or external debt classifications as described above.

MSB-250-300-002 Topic 2 Quiz

Accounts payable represent money that a firm owes to ________.

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