Which of the following is a liability account?

• A. Wages Expense
• B. Cash
• C. Wages Payable
• D. Revenue

Answer: (C)

Understanding what counts as a liability helps you see why wages payable fits the category. A liability is an obligation the company owes to others that will require future sacrifice of assets to settle. Wages payable represents wages earned by employees that the company still must pay, so it sits on the balance sheet as a current liability.

Wages expense, by contrast, records the cost of labor for the period and affects net income on the income statement. It does not represent an amount owed to someone else. Cash is an asset, the resource the company controls and can use to settle obligations. Revenue is income earned from operations, increasing equity, not a claim the company owes.

A quick tie-in to the double-entry system: when wages are incurred, you debit Wages Expense and credit Wages Payable, reflecting the cost and the obligation. When you actually pay, you debit Wages Payable and credit Cash, removing the liability as you outflow cash.