What term describes debts owed to creditors in a financial context?

In a financial context, the term that describes debts owed to creditors is correctly identified as "Accounts Payable." This term specifically refers to the amounts that a company or an individual is obligated to pay to suppliers or service providers for goods and services purchased on credit. Accounts payable are recorded as a liability on the balance sheet, indicating the company's responsibility to settle these debts in the future, typically within a short period.

This distinction is crucial for understanding an organization's financial health, as it reflects the short-term obligations that must be met to maintain operations and supplier relationships. In the management of an assisted living facility, accurately tracking accounts payable is essential for ensuring that vendors are paid promptly, which can affect everything from service delivery to the facility's reputation in the community.

The other terms, while related to financial concepts, do not specifically denote the debts owed to creditors. Accounts Receivable represents amounts owed to the business, Net Assets reflect the difference between total assets and total liabilities, and Liabilities encompass all obligations, of which accounts payable is a subset.