Which term means debts of a business?

• A. assets
• B. liabilities
• C. accounts receivable
• D. fixed assets

Answer: (B)

Debts of a business are called liabilities. A liability is an obligation the company must settle in the future, such as a bank loan or amounts owed to suppliers (accounts payable). These obligations represent money the business owes to others, not resources it owns. In contrast, assets are things the business owns that have value, like cash, equipment, or accounts receivable—the latter being money owed to the business by customers, which is an asset, and fixed assets are long‑term tangible assets used in operations, also assets. So the term that means debts is liabilities.