alleryStart learning →Which current liability is the counterpart of accounts receivable?
AShort-term notes payable
BAccounts payable
CAccrued expenses
DIncome taxes payable
Answer & Solution
Correct answer: B. Accounts payable
1. Accounts payable are the amounts a firm owes for credit purchases due within a year.
2. That account is the liability counterpart of accounts receivable, which records credit sales the firm has not yet collected.
3. Notes payable are short-term loans from banks, suppliers or others repayable within a year, which is borrowing rather than trade credit.
4. Income taxes payable are taxes owed for the current operating period but not yet paid.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 14 "Using Financial Information and Accounting", section 14.4 The Balance Sheet_
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