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What are liabilities in accounting?
61 Lectures 1 hours
43 Lectures 33.5 hours
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.
- What are contingent liabilities?
- Differentiate between contingent liabilities and liabilities
- What are Operating cash flow in accounting?
- What are the different branches of accounting?
- What are Investing activities in cash flow in accounting?
- What is payroll accounting in finance and accounting?
- What are the difference between accounting and auditing?
- What are cash flow from Financial activities in accounting?
- What are the traditional methods of appraisal in accounting?
- What are the modern methods of appraisal in accounting?
- Compare current liabilities, non-current liability, and contingent liabilities
- What is accounting and derive accounting equation?
- What is Accounting? Different Types of Accounting
- What are the sources of fund in finance and accounting?
- What is ledger in accounting?