Which of the following is not a liability?

Question

BlackTom AI · Accepted Answer

Liabilities represent present obligations the company must settle in the future by transferring assets or providing services; equity (such as common stock) represents owners’ residual interest.

1) Relevant knowledge points and concepts
- Balance sheet equation: Assets = Liabilities + Equity. 
- Liabilities: amounts owed to creditors (e.g., salaries, customer prepayments, loans, mortgages). 
- Equity: owners’ claims (common stock, retained earnings). Equity is not a legal obligation to pay an external party.

2) Step-by-step reasoning
- Identify each choice as an obligation to outsiders (liability) or an owner’s claim (equity). 
- Salary payable: company owes employees → liability. 
- Unearned revenue: company received cash but must perform services → liability until earned. 
- Notes payable: formal loan obligation to creditors → liability. 
- Mortgage: loan secured by real estate → liability. 
- Common stock: represents owners’ contributed capital; no contractual requirement to repay principal to shareholders.

3) Intermediate calculation/example to illustrate
Assume a small balance sheet: Assets = $100. If salary payable $10, unearned revenue $15, notes payable $30, mortgage $25, total liabilities = $10 + $15 + $30 + $25 = $80. Then Equity = Assets − Liabilities = $100 − $80 = $20. That $20 could be common stock and retained earnings. This shows common stock sits in equity, not in liabilities.

4) Why the correct answer is correct
Common stock is an owner’s financing (contributed capital). It does not represent a present obligation to outsiders and therefore is classified as equity, not a liability.

5) Why the other options are incorrect
- a. Salary payable: obligation to pay employees → liability. 
- b. Unearned revenue: obligation to deliver goods/services → liability. 
- d. Notes payable: contractual loan obligation → liability. 
- e. Mortgage: long-term borrowing secured by property → liability.

6) Conclusion
Therefore, the item that is not a liability is c. common stock, which matches the provided answer.

Which of the following is not a liability?单项选择题

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