Which line items typically represent liabilities?

Liabilities on a balance sheet refer to obligations that a company owes to external parties, which are expected to be settled in the future, typically involving the transfer of assets or providing services. The chosen option includes accounts payable and short-term debt, which are both classic examples of liabilities.

Accounts payable represents money that the company owes to suppliers for goods and services received but not yet paid for. This liability indicates that the company has a financial obligation to settle this amount. Short-term debt consists of borrowings that the company must repay within a year, further confirming that this option accurately reflects liabilities.

In contrast, the other options provided do not represent liabilities. Inventory and accounts receivable are current assets that a company owns. Cash is also an asset, and retained earnings reflect the cumulative profits retained in the business, which is part of shareholders' equity rather than a liability. Lastly, property, plant, and equipment represents tangible fixed assets owned by the company and are classified as non-current assets, not liabilities. Thus, the correct option directly aligns with what constitutes liabilities on a financial statement.