What is the term used to refer to money owed?

The term used to refer to money owed is “liabilities.” In financial accounting, liabilities represent obligations that a company or individual must settle in the future, usually in the form of money. They can arise from borrowing funds, purchasing goods or services on credit, or any other commitments that require future payment. Understanding liabilities is crucial because they are a fundamental component of a business's balance sheet, along with assets and equity, as they help in assessing the financial health and stability of an organization.

By distinguishing liabilities from other terms: assets are resources owned that have economic value, equity represents the ownership interest in the assets of a company after deducting liabilities, and revenue refers to the income generated from normal business operations, it becomes clear that liabilities specifically capture the concept of money that is owed.