Lesson 7.2 Account Title: Liabilities

Question 1

Account Title under Liabilities

• The amount of principal due on a formal written promise to pay. Loans from banks are included in this account.

Answer 1

Notes Payable

Question 2

Account Title under Liabilities

• Amounts owed to suppliers who provided goods and services to the company but did not require immediate payment in cash.

Answer 2

Accounts Payable

Question 3

Account Title under Liabilities

• Amount owed to employees for hours worked but not yet paid.

Answer 3

Wages Payable

Question 4

Account Title under Liabilities

• Amount owed for interest on Notes Payable up until the date of the balance sheet. This is computed by multiplying the amount of the note times the effective interest rate times the time period.

Answer 4

Interest Payable

Question 5

Account Title under Liabilities

• A formal loan that involves a lien on real estate until the loan is repaid.

Answer 5

Mortgage Loan Payable

Question 6

Account Title under Liabilities

• Amounts received in advance of delivering goods or providing services When the goods are delivered or services are provided, this liability amount decreases.

Answer 6

Unearned Revenues