A business purchasing inventory on credit creates a liability known as:_________
a. accounts receivable.
b. inventory.
c. accounts payable.
d. supplies.

Accounts payable (AP) may be a short-term debt and a liability on a record where a business owes money to its vendors/suppliers that have provided the business with goods or services on credit. Accounts payable is additionally named because the department that handles vendor invoices or bills and records the short-term debts within the book of account (GL). The AP department will verify invoices against (purchase) orders and make sure the goods or services were received before issuing payment to their vendors. Therefore correct answer is C, Accounts payable.

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A business purchasing inventory on credit creates a liability known as:_________ a. accounts receivable. b. inventory. c. accounts payable. d. supplies.

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A business purchasing inventory on credit creates a liability known as:_________
a. accounts receivable.
b. inventory.
c. accounts payable.
d. supplies.