Key terms(2.1.3)

Question 1

Liability definition

Answer 1

a liability is an obligation to pay another person/lender/supplier

Question 2

Limited liability definition

Answer 2

the most a shareholder/investor can lose (1) of the original amount they invested in the business

Question 3

Unlimited liability definition

Answer 3

the obligation of a business owner to cover all the debts of the business