- Trending Categories
Data Structure
Networking
RDBMS
Operating System
Java
MS Excel
iOS
HTML
CSS
Android
Python
C Programming
C++
C#
MongoDB
MySQL
Javascript
PHP
Physics
Chemistry
Biology
Mathematics
English
Economics
Psychology
Social Studies
Fashion Studies
Legal Studies
- Selected Reading
- UPSC IAS Exams Notes
- Developer's Best Practices
- Questions and Answers
- Effective Resume Writing
- HR Interview Questions
- Computer Glossary
- Who is Who
What are liabilities in accounting?
According to International Financial Reporting standards (IFRS), Liabilities are present obligations of the enterprises arising from past events, the settlement of which is expected to result in an outflow from the enterprises of resources embodying economic benefits.
In simple words, it is amount owned by the company to the creditors.
Classification of liabilities is as follows −
Current liabilities − Payment period is less than one year. It is also called as short term liability.
Examples − Accounts payable, interest payable, income tax payables, bills payable, bank account overdrafts, accrued expenses, short term loans.
Non – current liabilities − Payment period is more than one year.
Examples − Bonds payable, long term notes payable, deferred tax payable, mortgage payable, capital leases.
Contingent liabilities − Occurs due to specific reasons.
Examples − Law suits, warranty, pending investigations.
96 Views
