What term describes the total amount of money that a business owes to its creditors?

The total amount of money that a business owes to its creditors is best described by the term "liabilities." Liabilities encompass all financial obligations that a business is legally required to pay in the future, which can include loans, accounts payable, mortgages, and any other debts. This concept is a fundamental component of a company's balance sheet, reflecting its financial health and stability.

In contrast, the other terms have distinct meanings. Equity represents the ownership interest in the business after liabilities have been deducted from assets, essentially showing what the owners of the business truly possess. Assets are resources owned by the business, such as cash, inventory, and property, which provide future economic benefits. Capital usually refers to financial assets or resources that businesses use to fund their operations and growth, and does not directly indicate the amounts owed to creditors. Understanding these distinctions helps clarify the financial relationships within a company's structure.