The correct option is B. The total liability is $25,000. A debt or whatever you owe is referred to as a liability.
What is Total Liability?
A debt or whatever you owe is referred to as a liability. Once you are aware of your entire liabilities, you can deduct these from your total assets, or the market value of your possessions.
Given,
Accounts Payable = $5,000
Long-term Notes Receivable = $10,000
Accounts Receivable = $15,000
Accrued Expenses = $3,000
Cash = $10,000
Short-term Notes Payable = $7,000
Retained Earnings = $2,000
Accumulated depreciation = $2,000
Prepaid Expenses = $3,000
Capital Stock = $8,000
Supplies = $7,000
Required to calculate Total Liability=?
Total liabilities = Accounts Payable + Capital Stock + Short-term Notes Payable + Accrued Expenses + Retained Earnings
Total liabilities = 5000 + 8000 + 7000 + 3000 + 2000
Total liabilities = $25,000
Thus, the Total Liability is $25000.
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