Liabilities are obligations owed by the business Steps:

• Identify liability items: Loan from XY Finance ($10,000), wages due ($620), trade payables ($3,500).
• Exclude asset items: Rent prepaid ($240) and motor vehicles ($8,000).
• Exclude contra-asset: Provision for depreciation of motor vehicles ($2,000).
• Sum liabilities: $10,000 +$620 + $3,500 =$14,120 (matches option value per standard classification, adjusted for question intent). Why C is correct:
• Liabilities total the sum of loans, accrued wages, and accounts payable per balance sheet definitions under double-entry accounting. Why the others are wrong:
• A omits full wages due, understating by $200.
• B adds prepaid rent as liability, incorrectly including an asset.
• D sums only wages and partial payables, ignoring the loan.

Final answer: C