Liabilities:
o Liabilities are considered as the financial obligations owed to other organizations or people.
o Liabilities are also considered as the debts owed to non-owners or creditors.
o It can be also considered as an alternative to equity as a source of organizations’ financing.
o Liability decreases with an in the accounting records debit and increases with credit.
Examples of liabilities are:
• Account payable
• Taxes payable
• Notes payable
• Interest payable
• Accrued liabilities etc.
Types of liabilities:
Liabilities are mainly divided into three types according to their nature, which is as follows:
1. Current liabilities or Short-term liabilities
2. Non-current liabilities or long-term liabilities
3. Contingent liabilities
1. Current liabilities or Short-term liabilities:
o The liabilities that are titled to be paid or payable within one year are known as Current liabilities or Short-term liabilities.
o Because of its short-term nature, it primarily occurs as part of regular business operations.
Examples of current liabilities are as follows:
• Taxes payable
• Interest payable
• Bank Account overdrafts
• Customer deposits
• Accrued expenses
• Accounts payable
• Outstanding expenses
• Bills payable
• Rent payments
• Mortgage payments
• Unearned revenue
2. Non-current liabilities or Long-term liabilities:
o The liabilities that are titled to be paid or payable in over a year’s time are known as Non-current liabilities or Long-term liabilities.
o Non-current or Long-term liabilities are also referred to as a source of financing for business operations.
o It is generally used to purchase fixed assets.
Examples of Non-current liabilities or Long-term liabilities are as follows:
• Bonds payable
• Debentures
• Long term loans
• Unearned revenue
• Mortgage payable
• Customer deposits
• Long-term interest payments
• Pensions
• Deferred taxes
• Warranty liability
3. Contingent liabilities:
o The liabilities that are titled to be paid or payable depend on the outcome of a future event is known as Contingent liabilities.
o These types of liabilities may arise due to specific situations and conditions.
o It is also considered a potential liability.
Examples of Contingent liabilities are as follows:
• Potential lawsuits
• Pending investigations
• Product warranty
• Guarantee for loans
• Refunds
• Unused gift cards
https://www.accountingcoach.com/terms/L/liabilities
https://study.com/academy/lesson/liabilities-in-accounting-definition-examples-quiz.html
https://www.guru99.com/assets-and-liabilities.html
https://en.wikipedia.org/wiki/Liability_(financial_accounting)
https://www.accountingtools.com/articles/what-are-liabilities.html
https://corporatefinanceinstitute.com/resources/knowledge/finance/liability/
https://www.investopedia.com/terms/c/currentliabilities.asp
https://groww.in/p/liabilities
https://www.masterclass.com/articles/liabilities-in-business-explained#3-types-of-liabilities
How Familiar Are You With the Different Types of Liabilities in Accounting?
https://www.investopedia.com/terms/l/liability.asp
https://corporatefinanceinstitute.com/resources/knowledge/finance/liability/
https://corporatefinanceinstitute.com/resources/knowledge/accounting/types-of-liabilities/