Below are some of the accounts that Company J has on their books:

Cash and Cash Equivalents $1,000

Insurance Expense $500

Accounts Payable $700

Prepaid Rent $200

Accounts Receivable $500

Deferred Revenue $1,200

Inventory $600

Which of the amounts below is the correct total of liabilities?

a) $2,300

b) $1,900

c) $700

d) $1,200

Question

Business

Giana Elliott

10 January, 23:39

Below are some of the accounts that Company J has on their books:

Cash and Cash Equivalents $1,000

Insurance Expense $500

Accounts Payable $700

Prepaid Rent $200

Accounts Receivable $500

Deferred Revenue $1,200

Inventory $600

Which of the amounts below is the correct total of liabilities?

a) $2,300

b) $1,900

c) $700

d) $1,200

+2

Answers (1)

Know the Answer?

Amiyah Cross · Answer 1

b) $1,900

Explanation:

The computation of the total liabilities is shown below:

= Accounts Payable + Deferred revenue

= $700 + $1,200

= $1,900

The other items are related to the expenses which are shown in the income statement and current assets which are shown on the balance sheet

Therefore, only two items are shown in the total liabilities.