*Liability
1.A liability is a company's legal debt or obligation that arises during the course of business operations.
2.Liabilities are settled over time through the transfer of economic benefits including money, goods or services.
3.An obligation that legally binds an individual or company to settle a debt
.
For example, if Obama hits Banki moon's car, Obama is liable for the damage to Banki moon's car, because Obama is responsible for the damage.
*Breakdown of liabilities
1.Current Liabilities
2.Non current Liabilities
*Current Liabilities
2.accounts payable,(This account shows the amount of money the company owes to its vendors)
3.accrued/accrual
4.tax payable within one year.
5.wages payable.
6.bank overdraft
7.dividends payable(Payments due to shareholders of record after the date declaring the dividend)
1.long-term borrowing/bank loan
2.bonds payable (Long-term lending agreements between borrowers and lenders. For a business, it’s another way to raise money besides selling stock.)
3.long-term lease obligations.(Capital leases (you record the rental arrangement on the balance sheet as an asset rather than the income statement as an expense) that extend past 12 months of the date of the balance sheet)
4.Any non-current liabilities will be listed on the company's balance sheet
5.Product warranties: Report as non-current when the company expects to make good on repairing or replacing goods sold to customers and the obligation extends beyond 12 months from the balance sheet date.
1.A liability is a company's legal debt or obligation that arises during the course of business operations.
2.Liabilities are settled over time through the transfer of economic benefits including money, goods or services.
3.An obligation that legally binds an individual or company to settle a debt
.
For example, if Obama hits Banki moon's car, Obama is liable for the damage to Banki moon's car, because Obama is responsible for the damage.
*Breakdown of liabilities
1.Current Liabilities
2.Non current Liabilities
*Current Liabilities
*Current liabilities are a company's debts or obligations that are due within one year, appearing on the company's balance sheet.
*The liabilities that are expected to be settled within one year are classified as current liabilities.
*Essentially, these are bills that are due to creditors and suppliers within a short period of time. Normally, companies withdraw or cash current assets in order to pay their current liabilities.
*Example of current liabilities
1.short term debt,
2.accounts payable,(This account shows the amount of money the company owes to its vendors)
3.accrued/accrual
4.tax payable within one year.
5.wages payable.
6.bank overdraft
7.dividends payable(Payments due to shareholders of record after the date declaring the dividend)
*Non current Liabilities
*Non-current liabilities are a business's long-term financial obligations that are not due within the present accounting year.
*Examples of non-current liabilities
1.long-term borrowing/bank loan
2.bonds payable (Long-term lending agreements between borrowers and lenders. For a business, it’s another way to raise money besides selling stock.)
3.long-term lease obligations.(Capital leases (you record the rental arrangement on the balance sheet as an asset rather than the income statement as an expense) that extend past 12 months of the date of the balance sheet)
4.Any non-current liabilities will be listed on the company's balance sheet
5.Product warranties: Report as non-current when the company expects to make good on repairing or replacing goods sold to customers and the obligation extends beyond 12 months from the balance sheet date.
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