Which Account is not a Liability Account? (a) Account Payable (b) Accrued Expenses (c) Cash (d) Notes Payable

By BYJU'S Exam Prep

Updated on: November 9th, 2023

Cash is not a liability Account. As against liability is the financial value of an obligation or debt payable by the business to another organization or person. Liabilities are not subject to depreciation. A loan that needs to be repaid and from which cash will flow.

Non-Liability Account

Resulting of business transactions, a company records the following in a liability account, which is a general ledger account:

  • Payable to suppliers for products and services purchased on credit.
  • Amount due to banks and other lenders as principal for the loan.
  • Costs that buyers have prepaid, deposits made by customers, and other amounts that have been incurred but not yet processed.
  • Certain business taxes have been deferred.
  • Contingent Liabilities that are Probable and Quantitative.

Examples of Liability Accounts

Common liability accounts used with the accrual method of accounting include:

  • Accounts Payable
  • Deferred Income Taxes
  • Notes Payable or Loans Payable
  • Accrued Liabilities or Accrued Expenses
  • Unearned Revenues or Customers’ Deposits

Liabilities are listed on the balance sheet as either current liabilities or noncurrent (or long-term) liabilities. Liabilities are balances that are almost usually credit balances.

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