Karen has decided to calculate her net worth. She has these items listed so far: an antique bracelet, twenty dollars cash, a credit card bill, a checking account statement. Which of these is a liability?

A credit card bill is a liability.

Answer: Option 3.

Explanation:

Liability of a person is something that he owes towards some one. A liability is not possessed by the person totally on his own. It is to be given to some one else in one way or the other.

A liability is like a burden on a particular person. Since a credit card bill is to be paid to the company from which the credit has been taken, it has to be paid back to that company. So it is like a burden on Karen. Thus it is a liability to be paid off.