Liabilities
A liability of a company is any financial obligation the company owes to someone else, including debt, taxes, payroll, accounts payable, and future obligations to provide services or deliver goods. Like assets, liabilities in a balance sheet are classed as current or long-term.
A current liability is an obligation the company expects to pay off within 12 months. Typical current liabilities include:
• Accounts payable. A company’s accounts payable, or payables for short, are amounts the company owes to creditors and suppliers—in other words, the company’s bills. The term is often used to refer to trade payables owed to suppliers on open account.
• Accrued liabilities. Also known as accrued expenses or simply “accruals,” accrued liabilities are expenses other than accounts payable that have been accrued but have not yet come due. Payroll and benefits, accrued rent, or marketing and distrib