What type of liability is money owed to suppliers for purchased goods or services?

The correct choice highlights "Accounts Payable," which refers specifically to the amounts a company owes to its suppliers for goods and services that have been purchased on credit. This liability is crucial in business operations as it reflects the company's obligation to pay its suppliers within a relatively short time frame, typically agreed upon in the terms of the credit.

This designation as "Accounts Payable" is essential because it aligns with how businesses manage their cash flow. Companies often rely on credit from suppliers to maintain liquidity and ensure they can continue with operations while managing their outgoing cash. Essentially, Accounts Payable is a key component in the financial statements, representing a promise to pay, which affects both the balance sheet and the cash flow statement.

Short-term debt, while it could include obligations that need to be settled within a year, is broader and encompasses loans and other financial borrowings that may not be exclusively for purchasing goods or services from suppliers. Similarly, accrued expenses represent liabilities that a company has incurred but has not yet paid, often for services received. Long-Term debt pertains to obligations that have a longer repayment period, generally exceeding one year, and does not fit the context of payments for purchases made in the short term.

This structured classification of liabilities helps businesses manage their obligations