Question

    Which among the following would be classified as a part

    of Internal Liability?
    A Loan taken by an employee Correct Answer Incorrect Answer
    B Profits earned by the company not yet distributed Correct Answer Incorrect Answer
    C Loan taken from the bank Correct Answer Incorrect Answer
    D Assets bought from capital employed Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    All obligations which a business has to pay back to internal parties such as promoters (owners), employees etc. are termed as internal liabilities. Example – Capital, Salaries, Accumulated profits, etc. Profits earned by the company not yet distributed would be the part of internal liability.

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