Which items are part of the liabilities section on a balance sheet?

• A. Investments in marketable securities.
• B. What is owed to others or collected in advance.
• C. Cash on hand.
• D. Owner contributions.

Answer: (B)

On a balance sheet, liabilities represent obligations to outsiders or funds that have been collected but not yet earned. The item that fits this description is money owed to others or amounts received in advance for goods or services not yet delivered. These are classic examples of unearned revenue and accounts payable, which are recorded as liabilities because they require future payment or fulfillment.

Investments in marketable securities are assets because they represent resources the entity owns that have future economic benefit. Cash on hand is also an asset for the same reason. Owner contributions, such as capital invested by owners, increase equity, not liabilities, since they represent the owners’ claim on the assets.

So the statement that aligns with the liabilities section is money owed to others or collected in advance.